In these fraught economic times, it’s getting harder than ever to operate a small business. In fact, many Texas business owners are struggling to stay afloat and make payroll — let alone a profit.
With these adverse conditions piling up, it’s easy to accrue debts you struggle to pay. While there are various ways to manage your out-of-control debt, one thing that you must avoid is the fraudulent conveyance of items of value.
What is fraudulent conveyance?
This term relates to giving, transferring or selling property for far less than its true value in order to make that property off-limits to creditors or others with the legal right to settle a debt with your business.
Basically, it is a strategy to deny those with legitimate financial claims against your company the right to satisfy those creditors’ debts. This is one of those situations where the actions taken to hide the assets or funds are far worse than having the original debt.
What are some better options?
Since every business owner’s circumstances are unique, there is no one-size-fits-all answer to corporate debt issues. However, the last thing you want to do is make your situation worse by attempting to hide or unload company assets so you don’t have to pay the debt.
A financial or legal adviser can help you untangle the chains of debt and find a legal and viable path to clearing the debt and resolving your issues with your creditors. Once you are armed with knowledge, you will be in a much better position to take the necessary actions.
