Tuesday, April 21, 2020

Payment Abatements for COVID-19

If any of my prior clients are making settlement payments on a monthly installment plan and are experiencing cash flow issues due to the current crisis, feel free to contact me for assistance.
I will contact the creditor or their attorney and attempt to negotiate a temporary payment abatement on your behalf at no charge.

Sunday, April 5, 2020

Payable Accounts During COVID-19

Many businesses have found themselves with drastically lower revenues or even no revenues at all during this crisis.  Unfortunately, bills still need to be paid.

Overall, I have found most commercial creditors to be sympathetic to this situation and willing to allow some flexibility with payments on a temporary basis.

I have always said communication with creditors is key when experiencing cash flow difficulties.  Although commercial creditors may be fully aware of these issues today, it is still important to remain in contact.  Not making payments along with not communicating will leave creditors with little option but to step up collection efforts.

Keep in touch with any past due accounts during this time and discuss the possibility of short term flexible payment options to help get through.  I believe you will find your creditors to be receptive and willing to work toward a manageable payment plan.

Scott F. Soape

Friday, February 7, 2020

Creative Settlements

Occasionally,  settlement negotiations require some creativity with payment arrangements.  My initial consultation with a business owner helps to identify the type of payment plan we will pursue and propose to their commercial creditor(s).

Many times, a client is able to offer a lump-sum payment for a fraction of a claim.  Most commercial creditors are more willing to compromise on their claims if they do not have to carry payments over an extended period of time.  Lump-sum payoffs typically provide the largest discounts and I have negotiated settlements for pennies on the dollar with many of these cases.

The most common settlements are structured on monthly payment plans.  Most of my clients have depleted their liquid resources by the time they retain my services and they are unable to offer a lump-sum payment.  Depending on our cash flow projections, settlement negotiations revolve around manageable monthly installments along with a discount on the principal claim.

When revenue projections are uncertain beyond a period of time, I have arranged for monthly payments with a balloon payment at the end and the agreement to reevaluate finances with the commercial creditor at that time.  This usually results in adjusted monthly payments up or down going forward.

I have also negotiated cases where my client was able to offer a larger up-front payment followed by lower monthly payments.  This usually helps to get a creditor's attention and eases their concerns about waiting for payment on the full settlement.

With over 22 years of settlement negotiation experience, I can typically steer a settlement in a direction that best benefits my client's financial situation and convince the creditor it is also in their best interest to accept.

Scott F. Soape

Tuesday, January 14, 2020

Invoice Factoring

Many businesses may be able to convert their unpaid or slow-to-pay outstanding invoices into cash through factoring.

Factoring companies offer to advance 80% to 90% of the total invoices for fees typically ranging between 1% to 2.5%.  Invoices are transferred to the factoring company where they then collect and extract their fee from proceeds.  Collected funds after the fee are then passed back to the business.

The below article provides a recent review of some of the top factoring companies:


Scott F. Soape

Wednesday, December 4, 2019

Added Value

I was recently asked by a prospective client "What is the added value your service brings to a commercial debt settlement?"

Good question... and one I am always happy to explain.

To begin, having over 22 years of professional debt settlement negotiation experience and hundreds(if not thousands) of successful settlements, I know HOW to achieve the best outcome for my client.  Thoughtful and proper wording of offers is essential and includes positioning my client in the creditor company's eyes as deserving of flexibility with payment arrangements.

Additionally, I often already have a very good working relationship with many commercial creditors and their agents or attorneys.  In each jurisdiction around the country, there are a few primary creditor law firms and I have dealt with most at one time or another over the years.  I know what to expect from them going into a negotiation and they trust that my clients will follow through with payment based on my representation.

Finally and perhaps most importantly, my service relieves my clients of the burden of dealing with past due or disputed claims.  Most of my clients are small to medium size business owners working full time to make their operations successful.  Dealing with creditors and their agents takes time away from generating revenues and growing a business.

My fees are always reasonable and my goal in each settlement negotiation is to SAVE my client substantially more than my fee.

Scott F. Soape

Friday, September 20, 2019

Flat Fee vs. Percentage of Savings

My associates and colleagues know I have been a long-time proponent and advocate for flat fees and/ or capped fees in this profession.

When I created my company in 1997, there was very little competition in the Commercial Debt Resolution profession and most everyone was charging a percentage of savings for settlements.  That percentage typically ranged between 25% to 35% of the amount saved on a claim for a debtor company.  The sales pitch went something like:

"Hey, this puts me on the same side of the table as my client since the more I save them, the more I make.  So, my incentive is to save them as much as possible.  All parties win with a successful settlement."

Makes sense, right?

Well, I quickly found the EXACT OPPOSITE was usually true.

Consider a client with a $100,000 claim and a fee set at 30% of savings.  If I can negotiate a $40,000 settlement, I just saved my client $60,000 on the claim.  Unfortunately, I just created a new debt with my $18,000 fee ($60,000 x .30).  Sure, the net savings for my client is $42,000 but now they have to figure out how to pay me $18,000.

My initial resolution to this issue was to cap my fee and continue to charge a percentage of savings.  This helped to avoid any fee "sticker shock" for my client at the end of settlement negotiations.  I still utilize this fee structure for certain cases where it makes sense and it continues to be well received.

However, most of my cases are worked on a fair and reasonable flat fee basis so there is absolutely no uncertainty regarding my fee from beginning to end of negotiations.  This fee is agreed upon after consulting with a prospective client and is based on the size and complexity of each case.  After negotiating hundreds (if not thousands) of settlements over the past 21 years, I usually know what to expect once I gather some background on a claim.  An upfront fully refundable retainer is typically required before I begin negotiations which also makes payment of the balance of my fee easier at the end of a successful settlement negotiation.

A flat fee also makes sense for cases where only a payment arrangement is negotiated with no discount.

I encourage all prospective debt settlement clients to question any proposed open-ended percentage of savings fee that does not include a cap.  Nobody wants to resolve one problem debt just to create another.

Scott F. Soape

Thursday, June 27, 2019

Communication is Key

Many of the past due debt situations I encounter could have been avoided with better communication between the parties.

Most commercial creditors are willing to be flexible with repayment if they are kept informed of a debtor company's financial situation when times are difficult. These problems usually are the result of not being paid in a timely manner on their own accounts receivable, causing a domino effect.

When communication stops, commercial creditors have little choice but to escalate collection actions by sending demand letters, retaining outside collection agencies or attorneys and, eventually, filing lawsuits to collect. By keeping the lines of communication open and explaining the reasons for late payments, a business owner can often avoid or delay these stepped up collection actions and retain desired relationships while they work to get their finances in order.

Scott F. Soape