While financial struggles often impact individuals, it can also happen on a much larger scale. Businesses and companies often run into financial troubles that could ruin them.
Recently, Charlotte Russe, a popular juniors brand company was facing $240 million of debt, which was due to mature come 2019. Fortunately for the San Francisco based company that has 545 stores in the United States, a debt restructuring agreement has kept them from a potential bankruptcy filing.
The debt restructuring agreement will reduce loan interest rates and drop the company’s debt down to $90 million. In fact, the interest was cut in half and additionally, the loan’s maturity date was pushed back three years to 2022.
In exchange for debt relief, the lenders get 100 percent equity in the company. In addition, the brand must meet certain conditions under the agreement, like seeking out rent relief to help reduce expenses and making moves to improve operational efficiency.
The CEO of Charlotte Russe welcomes the term loan agreement, noting it will help the company repay its long-term debt while improving financial flexibility. They look forward to upgrading the brand and look to future successes.
Bankruptcy Is Not Your Only Option
Bankruptcy definitely is a solid choice if you need to get a fresh financial start, but that does not mean it is your only option. There are many alternatives outside of filing for Chapter 7 or Chapter 13 bankruptcy. Taking the route of Charlotte Russe — debt restructures — is a perfectly viable solution.
In fact, a couple popular options that fall under debt restructure are debt consolidation and debt settlement. In a nutshell, debt consolidation is when you reduce the number of creditors you have to pay, while debt settlement is reducing the amount of actual debt you owe.
Debt consolidation will see you paying one creditor over a longer period of time. You sometimes have to put up collateral to earn consolidation and if you default you will lose that collateral. If you agree to a debt settlement you will not owe that creditor money but your credit report will take a significant hit.
In the end, filing for bankruptcy might be your best option, but in order to really be sure, you should consult an experienced attorney.
Bankruptcy Attorneys in NJ Can Help With Your Debt
In New Jersey, the place to turn to when dealing with debt is the Law Office of Joel R. Spivack. There, Mr. Spivack utilizes his 25 plus years to help his clients achieve debt relief, whether through bankruptcy or debt restructuring.
He understands just how challenging and stressful debt can be and will do what he can to make sure you do not have to continue dealing with it. All you have to do is contact him at 856-488-1200 and schedule a free initial consultation to begin discussing your options.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.
