This time i will blog about how to free from debt? Before, i have a debt about $20 million dollar from my company, i have a lot of debt to my supplier and have a difficult to pay my employer salary. That moment is the hardest moment in my life. Now i will share how i can survive and exit from that situation.
First things that you have to know is, what kind of debt that you have? you have to elaborate all kind of debt that you have and try to settle it one by one. The first debt that you have to clear is high interest debt, like credit card. The high interest rate can kill your cash, so you have to try to pay it each month. Don’t pay it all together, i will tell it later.
This strategy can be use for one condition, you should never have a debt with loan shark, gangster or any kind of illegal loaner. If you have it, you are in the hardest position, because they will try to make you pay your debt with interest AND they will try to get it in many ways. It was dangerous for your life, so you have to settle it as soon as possible. You can try to borrow from your family, friends, or use your credit card, the key point is you have to quickly pay them first.
Most of my debt is from the bank, if you have a debt with them, of course you have to pay them. One of good condition in this situation that bank is a legal institution. Never avoid them, this is the biggest mistake that everyone do, you have a debt with the bank but not the officer. You have to friendly with the officer because they know how to help you in this condition.
Bank is a legal institution, so you can do one great thing NEGOTIATION. Try to negotiate with them, you can ask them to freeze your interest, most of the bank will do it because they know it was useless to force us. They just want to get their money back as fast as possible. there is a solid reason why they have to do that, because they have to do a good things in order to win in the court later.
Never sign anything, because of this situation, bank usually try to force you to sign a paper. Most of the paper is ask your personal guarantee and auction letter if you can not pay in certain circumstance. Avoid to sign this letter, because this letter is have a strong legal to ask debtor to pay as soon as possible with all of their private assets. So if you don’t sign it, they can not sue you because fail to pay debt? of course no, they still have a legal standing to sue you, but it will need a time to finalize it. They will need 3-10 years to finish the process, that is why in this time you have to wake up and restructure your company.
One key point, YOU HAVE TO still pay the bank each month no matter how much. Even the bank is never ask you to pay it anymore, but you have to pay it. It is because if you still pay it, your credit score is still 4 not 5. If you stop paying, your credit score will be 5 and they can start take action to auction your asset. ALWAYS keep communicating with them, and never avoid them, it is useful if they start the court later.
Cash is the king, this is your only life savior to break your debt, cash is your engine if you run out, you can not survive anymore. You can try to sell anything that you don’t need to secure a sum amount of money. How much? it is depending on your business kind, but normally you need to secure 3-6 month of your company expense.
Try to saving your expense, try to cut cost unnecessary expense ,in this state every cash is really useful to run your engine. Try to contact your supplier and negotiate with them that you are willing to pay them each month, in order to get your supply. If they do not agree? try to find a new supplier and negotiate with them, most of them to ask cash, this is why cash is the king, you can buy the supply now and keep good relationship with them, if they are trust you they will give you credit. This is the key how you will survive later, because credit is leverage without interest.
Keep in the note that YOU have to pay your old supplier debt each month, even they don’t want to supply you a goods. It is to avoid their action to bankruptcy your company, it was the worst scenario, all of your effort will become useless. But bankruptcy also risk for them, they will never do it if you still pay them. Because if they fill you bankruptcy and you have nothing, you don’t need to pay them anymore. They will avoid that risk too.
Pay your employer, they are you best assets. No matter what happened, a company should priority to pay your employer salary, because they also have a family to feed. they trust you will everything that they have, they spend most of their time to your company, YOU should prioritize their rights, even you should bankruptcy yourself. If they still want to moving with you, you already have a great chance, because without them your effort will be useless.
if it is really hard to keep all of them, you have to cut off your employer and keep the right one into right position. It is hard to do, but you still have to do it in order to keep your company and your employer survive. YOU have to give their rights and thank you for them because they are already spent their time and expertise with you until now.
Last but not least, secure your cash and save every penny that you have, keep collecting your cash because when the time is come. The bank will do auction for your asset, most of your asset will be auction in a big discount. Now you have the money, you can buy back your asset in the great discount.
Disclaimer: i write this not to teach you to avoid your debt, i write this to tell you that you still can survive even you have a big debt, you just need to know how to survive.
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