As a self-employed person in Belgium, it can sometimes be difficult to keep all the balls in the air. Financial problems can pile up and before you know it, you find yourself in a situation you can no longer oversee. Fortunately, there is such a thing as debt mediation for the self-employed. In this article, we explain how it works. 👩💼💼
Acknowledging what debt mediation is 🔎
Debt mediation is basically a process where a neutral third party, the debt mediator, mediates between the debtor and his creditors to reach an agreement. The goal? To alleviate your debt burden and make it manageable.
It is important to note that debt mediation can be for self-employed people, but it is primarily made for debts incurred in your personal life.
Tip
For debts that come from your self-employed activities, there are specialised organisations.
The importance of debt mediation 🎯
Indirectly, your private life obviously affects your self-employed activities, hence the importance of debt mediation for the self-employed. In fact, it can bea crucial tool in solving payment problems and preventing bankruptcy. Through debt mediation, self-employed people can create a repayment plan that takes into account their current financial situation, allowing them to pay off their debt without having to close their company. This is especially important as many self-employed people are often personally liable for their company’s debts.
Debt mediation also allows self-employed people to negotiate payment terms with their creditors. This may include, for example:
- Getting lower interest rates;
- Being able to pay off the debts in terms;
- Or even, getting part of the debt cancelled
A debt mediator offers flexibility
Flexibility can be invaluable for self-employed people trying to save their companies and restore their financial stability.
In addition, debt mediation can help self-employed people reduce the stress that often accompanies money problems. It can be difficult to stay focused on your company and remain productive when you are constantly battling creditors. By engaging a debt mediator, you can drop that burden from your shoulders and get back to focusing on building your company.
How does debt mediation for the self-employed work? 🔄
It usually starts with finding a good debt mediator. That person is going to view your financial situation, including your debts, income and expenses. Then that person/organisation will talk to your creditors to close a deal that is good for everyone. The ultimate goal of debt mediation is to reach an agreement that satisfies both the self-employed person and the creditors.
For example, it may involve the self-employed making monthly payments to creditors, with the debt being paid off over time.
The importance of open communication 💬
Successful debt mediation for the self-employed requires open communication between all parties involved. So it is best to be honest about your financial situation and willing to cooperate. In addition, it is also important that creditors are willing to cooperate with the repayment plan. Ultimately, they also just want their money back, so it is in their interest to help you instead of bankrupting you.
Other options for debt mediation 🔄
Besides debt mediation, there are other options available for self-employed people facing payment problems. One of these options is collective debt settlement, where a court imposes a repayment plan on the debtor and his creditors.
Conclusion 📝
Debt mediation for the self-employed can be a valuable tool to solve payment problems and avoid bankruptcy. It allows self-employed people to pay off their debts in an organised way, while keeping their companies running. 🔁
It is important for self-employed people to know that they are not alone in their financial struggle! They can search for professional help from debt mediators, who can guide them through the process and help them make a new start. 🚀
Thinking about quitting your sole proprietors?
Then view our blog article on how a quitclaim works.
