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Business Debt

California Business Debt Defense Attorney

Performance or Flat Fees available for all pre-litigation claims against you or your business

Commercial debt can be the hardest debt to resolve. Be it space or equipment leases, Merchant advances, Payroll loans, Vendors, or anyone else, Fitzgerald & Campbell, APLC can resolve it for you.

First, what is a Business Debt? (aka Commercial debt)

Business debt refers to the money a company owes to creditors or lenders. It's a financial obligation that a business assumes in order to fund operations, expand, or invest in various resources. Debt can come in different forms, each with its own terms, conditions, and implications.

Common examples of business debt include:

  • Bank Loans: Traditional loans acquired from banks involve borrowing a specific amount of money, often with fixed or variable interest rates, and a set repayment schedule.
  • Lines of Credit: Similar to a credit card, a line of credit allows a business to borrow up to a certain limit, but interest is charged only on the amount borrowed. It offers flexibility in borrowing as needed.
  • Business Credit Cards: Used for day-to-day expenses, these cards offer a revolving line of credit. Businesses must pay the minimum amount due each month, and interest is charged on the remaining balance.
  • Trade Credit: This is when a supplier allows a business to buy goods or services on credit, giving a specific period (e.g., 30 days) to pay the invoice.
  • Bonds: Companies issue bonds as a form of debt to raise capital. Investors buy these bonds and, in return, receive periodic interest payments and the repayment of the bond's face value upon maturity.
  • Mortgages: When a business purchases real estate, it might take out a mortgage, which is a loan secured by the property.
  • Equipment Financing: Loans specifically taken to purchase equipment or machinery for the business. The equipment itself often serves as collateral for the loan.
  • Factoring or Invoice Financing: Involves selling accounts receivable (unpaid invoices) to a third party at a discount in exchange for immediate cash.

These examples illustrate various ways businesses can acquire debt to finance operations, expansion, or specific investments. Each type of debt has its own terms, interest rates, and impact on a company's financial health and flexibility. Proper management of debt is crucial for businesses to maintain stability and growth without becoming overly burdened by repayment obligations.

Some purchases are not as easy to classify. For example, auto expenses are a common area of crossover between business and personal.

*Personal Guarantees: if the debt is for business, it is business. The fact that an individual is responsible for the debt does not change the type of debt. The easiest way to think about it is: what did the money go for (business purpose or not), not who is going to pay it.

Second, Why is it Important to Determine if Debt is Business or Personal?

The law treats each type of debt differently. The laws prohibiting collection abuses do not apply to business debts. These laws only apply to “consumer debts”. Therefore, other than generic laws prohibiting harassing conduct, there is no limitation on when or how many times a collector can call on a business debt.

Distinguishing between business and personal debt is crucial for several reasons:

  • Legal and Liability Issues: Business debts are typically the responsibility of the business entity itself, not the individuals behind it. If there's a clear separation between personal and business debt, it protects individuals (like business owners) from personal liability in case the business faces financial troubles or defaults on loans. However, if personal and business finances are commingled, personal assets might be at risk in the event of business insolvency.
  • Tax Implications: Different tax treatments apply to personal and business debt. Interest on business loans is often tax-deductible, reducing the taxable income of the business. Mixing personal and business debt could complicate tax filings and potentially reduce the available tax benefits.
  • Credit Ratings: Separating personal and business debt helps in establishing and maintaining distinct credit profiles. A healthy business credit history is important for securing favorable terms on future business loans or lines of credit. Mixing personal and business finances can blur these distinctions and affect credit ratings for both.
  • Financial Clarity: Keeping personal and business finances separate provides a clear understanding of the financial health of both. It allows for accurate assessment and management of cash flow, expenses, and revenue, aiding in better decision-making for both personal and business finances.
  • Professional Image: Maintaining a clear separation between personal and business finances can also reinforce the professional image of the business. It demonstrates professionalism and responsible financial management, which can be important for attracting investors or partners.
  • Lender Requirements: Many lenders might require personal guarantees or collateral for business loans, but keeping personal and business debt separate can help limit personal liability to specific agreed-upon terms rather than general obligations.

Overall, keeping personal and business debt separate is essential for legal, financial, and strategic reasons. It's important to maintain clear boundaries between the two to protect personal assets, take advantage of tax benefits, maintain creditworthiness, and ensure accurate financial reporting.

Featured Case Results

  • December 28, 2023: Client Saved $19,753.00! From a $35,913.00 American Recovery Service Incorporated (ARSI) debt, that was settled for $16,160.00.
  • November 28, 2023: Client’s debt was reduced by $15,664.00! In a collection lawsuit in the amount of $45,664.00, that was settled for $30,000.00. After our attorney fees and costs of $6,850.00, client’s net savings amount was at least $8,814.00 (ODK Capital, LLC vs Client Case No. 22PSCV009XX – Los Angeles County)
  • November 1, 2023: Client’s debt was reduced by $11,546.00! From a judgment against our client in the amount of $31,546.00 that was settled for $20,000.00! After our attorney fees and costs of $2,160.00, client’s net savings amount was at least $9,386.00 (On Deck Capital, Inc. vs. Client Case # CVSW21019XX – Riverside County)
  • September 19, 2023: Client Saved 16,434.00! From a $20,542.00 Wells Fargo Business Direct debt, that was settled for $4,108.00.
  • September 5, 2023: Client’s debt was reduced by $10,416.00! From a judgment against our client in the amount of $26,416.00 that was settled for $16,000.00! After our attorney fees and costs of $3,555.00, client’s net savings amount was at least $6,861.00 (Mountain States Commercial Collections, Inc. vs. Client Case # CVRI21024XX – Riverside County)

See more results here.

DISCLAIMER: Every case is different. Results depend on the unique law and facts of each case. Fitzgerald & Campbell, APLC makes no guarantees or warranties about the outcome of any particular matter or case. The Fitzgerald & Campbell, APLC website, or the information contained within the website, should be construed as ATTORNEY ADVERTISING.


Lastly, Who Owes a Business Debt?

The first question on business debts is: who is the debtor? Is it you or the business or both? If you, as an individual, obtained the credit, or personally guaranteed the payment, then a claim can be made against you personally, regardless if it was for business purposes or not. If your business is a sole proprietor or partnership, you can be held personally responsible for the creditor’s claims. If the business was/is a duly authorized and properly maintained corporation or LLC and there is no personal guarantee, you cannot be held personally responsible.

FITZGERALD & CAMPBELL, APLC can help you to determine:

  • Is the debt personal or business?
  • Who is responsible for the debt?
  • What will happen if you default on the debt?
  • What we may be able to settle it for

Affordable Fees: We give businesses the choice of either a flat fee or performance based fee to settle creditor claims against your business.  If there is a lawsuit filed or a judgment already entered, we resolve those matters on a flat fee basis so you know exactly what your costs will be. Our flat fees include all expenses, even court filing fees and include trial. We also have very affordable payment plans.

COVID-19 was responsible for many businesses failing. If you decide that your business is going to fail, you will want to know if anyone will be able to go after you personally when the business is shut down. Call us for a FREE CONSULTATION to find out. DON’T IGNORE it, it’s not going to go away!

Suggested Reading:

Real Client Results

Conquering Your Mountain of Debt Since 1992
  • $1,043,087.06 settled for $492,701.56 Individual
  • Client Saved $27,433.00! UGH, I LLC.
  • $535,175.56 was settled for $375,000.00 Madison 65 Co
  • Client’s debt was reduced by $314,811.00! National Continental Insurance Company
  • $263,963.17 JUDGMENT VACATED! Los Angeles County Superior Court

Hear From Our Happy Clients

At Fitzgerald & Campbell, your satisfaction is our priority! See for yourself what our clients have to say about working with us.

    "It Was The Right Decision"

    Patricia and Fabiola were both such a great help from the start. It was the right decision to seek legal help when dealing with these debt collectors. The process with Fitzgerald & Campbell was very simple and straightforward, it reduced the stress of my situation greatly for a reasonable price. Highly recommend!

    - C.M.
    "Provided Clarity and Prompt Communication"

    We got involved in a domestication of sister-state judgment (from a vehicle accident in Nevada) that involved a different person with the same name, it was originally served to a different address. Several other attorneys had no clue how to deal with this case, suggesting to get our vehicle insurance involved. Attorney William J. Campbell, Luz Rodriguez and case manager Christina did a great job and provided clarity and prompt communication on how to file a motion to vacate this sister-state judgment. The case is now vacated and dismissed without prejudice. Highly recommended.

    - E.C.
    "Fitzgerald & Campbell is Truly Praiseworthy"

    I was in a difficult and stressful situation. I was sued and served over an old personal loan.
    Fitzgerald & Campbell helped me to settle and lowered the judgment amount in less than a month.
    This firm is outstanding and they care about their clients.
    Thank you, Ms. Patricia Mendez for being so passionate and so helpful about my case.
    Now, am stress free.
    Fitzgerald & Campbell is a truly praiseworthy and highly recommended firm.
    Thank you.

    - E.A.
    "You Are All Amazing"

    Thank you very much, Ma'am for the immediate help.

    You are all amazing!🙏🙏🙏

    - E.A.
    "I Can't Thank Fitzgerald & Campbell Enough"

    I found myself dealing with a judgement and wage garnishment, Fitzgerald & Campbell explained to me what my options were on how to settle and get myself out of this situation. I was supplied and guided on how to fill out proper paperwork and never once had to deal with said creditor myself, Fitzgerald & Campbell did all of the communication between myself and the creditor. I can't thank Fitzgerald & Campbell enough (especially Patricia!) For negotiating a settlement I could pay in full and put this whole ordeal behind me. If you are feeling stranded in a hole with everyone coming at you Fitzgerald & Campbell are there extending a friendly hand to get you out of that hole and back on your feet.

    - S.J.
"I've walked in your shoes! Let me do for you what I learned to do for myself." - Gregory M. Fitzgerald, Managing Partner