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About Commercial Debt

The business debt is collected through forced sale or auction of assets like building, land, equipments and even business accounts. Situation of corporate veil is applied when a company or business is viewed as a detached legal unit than the organization’s stakeholders and owners. The company or business is then legally responsible for its debt and not the persons who own it.

LLC only provides liability and monetary protection when the corporate veil is not penetrated. Corporate veil is actually pierced if a person uses limited liability corporation to pay personal expenses or does not have complete and valid LLC papers. The limited accountability of LLC can be challenged by creditors. These creditors can easily sue private individuals for outstanding commercial debt. Business debt cannot be remunerated through garnishment of wages when compared with personal debt. Though, creditors can put liens against the company’s land, property or equipments.

The overall debt collections are controlled by Fair Debt Collection Practices Act. Debt collectors looking for payment should provide complete billing of the arrears owed in order to avoid any type of confusions or errors. At the same time, full interest and applicable fees must be included in the final bill. Debt collectors should have valid authorization to collect the debt.

In an economic world where outstanding debt can make the difference between a successful business and bankruptcy, it has become very important to pursue debtors for sums owed. Most businesses are unable to recover the lost income at a profitable margin, spending too much time and money on the recovery process

Debt recovery specialists take away the risk by removing the company’s name from the debt collection effort up front. There is less chance of negative press affecting the bottom line, and at the same time, these agencies are more aggressive in their recovery, which allows them to collect the majority of outstanding debt for the business.