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The answer is to restructure the debt, every single one of those companies deals with failures and no-pays on a daily basis. a) Most lawyers, especially extend
by aresant 16y ago
The answer is to restructure the debt, every single one of those companies deals with failures and no-pays on a daily basis.
a) Most lawyers, especially extending credit terms in the startup field, will carry over that debt with interest for years. Call and state your case, make it clear it's no-pay right now either way, but you want to fulfill your obligation in the further - say start making payments in 12 months.
b) RackSpace - you owe personally or through corporation? If personal, call them and have the same conversation - speak with a manager and ask for payment terms outside of normal, otherwise you have to default. If corporate consider folding and walking away, corporate protection is there for a reason and even though it's not a stand-up thing to do, Rackspace's world is littered with bankrupt startups.
c) Visa & MC may be your big problem, getting blacklisted from merchant accounts isn't the end of the world but certainly something to avoid. Also nearly impossible to reach a human that can make decisions on terms. For a startup they should have a 20% merchant reserve on your account anyways, how far does that take you?
Bottom line, think 6 - 12 month terms instead of 12 day terms.
No reason at all you can't get there with the right amount of sucking it up and pleading your case.
- debtscrewed 16y agoThank you. a) Yes, and I'm dealing with a startup lawyer, at a very well-known Silicon Valley law firm (this is when we had money). He's been very very patient with our lack of being able to pay the retainer. b) Through the corporation. It's registered under the Inc and has the EIN associated with it. However, it also has my SSN associated as the primary contact. c) Well, I have a feeling that most of our credit card transactions are fraudulent, being in the space we are in. (For example, someone charged $12k on a card and tried to cash out to PayPal.) I'll call up Rackspace and give it a shot. Thank you.
- rwhitman 16y agoThe last startup I was involved in, the guy who was running it talked to the lawyers and got them to waive a good chunk of the retainer fees when it sank
- debtscrewed 16y agoThat's good to hear. I'd like to pay this lawyer in full for his services (retainer minus un-used retainer balance). I don't like screwing people over, even if they're expecting it to be a percentage of their clients that do that. I don't want to be in that percentage.
- eli 16y agoThat's admirable, but if you can't pay, you can't pay. It's not worth selling organs over.
- jacquesm 16y agoLet me correct a misconception here, you are not screwing people over, customers having payment issues is a risk of doing business, they all decided just how much debt they let you get in to. If you had set out to create this situation on purpose that would be screwing people over, now all that there is left to do is to shut down as orderly as you can and to have everybody absorb an appropriate part of the loss.
- netcan 16y agoTo take that further. Don't be that percentage by not acting like them. Don't hide or promise things you can't deliver. You go to them. Lay it out and work something out. Everyone takes risks doing people. Inability to pay is one. Bad people is another. The first is usually rarer and more manageable. The second is not so bad. You can avoid being in the second category. *Mixergy interviewed a bankrupcy lawyer a while ago. Maybe there's something useful for you in it. One useful thing I remembered: Discounted debt is usually taxable. Be careful you are not caught off guard. http://mixergy.com/russell-demott-interview/ http://mixergy.com/russell-demott-interview/
- jacquesm 16y agoThat's what I would expect here as well. Lawers are - if anything - pretty realistic about plucking feathers from frogs, and they'll be happy enough to see something rather than nothing at all. After all, they might be your preferred contact the next time you strike out and perhaps succeed.
- aresant 16y agoGood luck - transparency is the name of the game. Regarding (b) if your SSN is associated that's one thing - it's still the corporations debt and you can walk. If you gauranteed it via your SSN that's another story, and it will reflect on your credit.
- kls 16y agoWell, I have a feeling that most of our credit card transactions are fraudulent, being in the space we are in. What space are you in? Phone cramming or reg path reoccurring billing or something like that?
- damoncali 16y agoAlternatively, get a consumer loan from a bank and pay off your creditors. Pay the bank back over time.
- jotto 16y agohttp://www.prosper.com/ http://www.prosper.com/ for those that dont know, it's basically peer to peer lending. investors decide how much risk they want to take on, and prosper auto allocates it among people requesting loans. you'll probably get better rate from prosper than a bank.
- tghw 16y agoProsper is good, but I think the application and bidding process will be pushing the 12 day mark.
- debtscrewed 16y agoThat is a good idea, but my credit sucks so it might not be the best option to go with. Though it would help my credit tremendously, huh?
- bond 16y agoYou need to try it or you'll never know for sure...
- Kaizyn 16y agoGo to a local credit union instead of a big bank. You can probably also use your car or other assets as loan collateral. I'm sorry to hear you're going through this. The best of luck to you.
- tptacek 16y agoYou do not need to try it. It will not help your credit to take on more debt. It is a very bad idea to take out a personal loan to pay back a company debt. Why everyone on this thread isn't yelling this at you in all-caps is a mystery to me.