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Avoid Business Bankruptcy | Negotiate Secured and Unsecured Debt MCA | Leases | Vendors | Loans | Since 1998
           Avoid Business Bankruptcy | Negotiate Secured and Unsecured Debt  MCA | Leases | Vendors | Loans | Since 1998  

If you score 100% on this quiz, you know how to negotiate under stress

 

Business owners negotiate everyday. Therefore, it is completely understandable that many expect they will do well negotiating on their own behalf.  Our experience has shown us that this is not the case.

 

It is not the case because emotions are involved, it takes a lot of time, collectors can be harsh and the legal system is involved. Often the correct answer is completely counter-intuitive. 

 

Here is a quiz which will help you understand your readiness.  Here is a link to full explaination and answers. PDF Downloads of guides are at bottom of page.

 

Quiz Assumptions [ very important ]

 

  1. You want to stay in business but your company’s cash flow is extremely tight and you’re seriously past due with your creditors
  2. Base your answers to these questions only on the situation described without making any other assumptions.

 

 

Question 1

 

You have 4 past due creditors.

 

            Each is owed $10,000.

            They all have relatively equal negotiating leverage.

            None are suing.

            You don’t need to do business with any of them.

            You only have $4,000.

 

Which is your best option?

 

A. Send them all $1,000 each.

B. Try to settle with at least one of them for $4,000 or less.

C. Don’t pay any of them.

 

Question 2

 

You have 2 past due creditors that are demanding payment.

 

   One is owed $1,000 and is willing to settle for 50% or $500.

   The other is owed $10,000 and wants it all now.

   But you only have $500 now and will only be able to afford to pay $250

   a month toward these debts in the foreseeable future.

 

Which is your best option?

 

            A. Settle the $1,000 debt for $500.

            B. Pay the $500 to the $10,000 creditor.

            C. Hold on to your $500 and don’t pay either of them.

            D. Split the money pro-rata.

 

Question 3

 

Is it better to settle with creditors

 

A: As quickly as possible?

B: As slowly as possible?

C: Some where in between?

 

Question 4

 

You have only $5,000 and are past due with 3 creditors.

 

Creditor A has just sued you for $10,000 and is willing to settle for $5,000.

Creditor B is owed $5,000, is a necessary supplier and is not willing to settle

for less than they are owed or a payment plan.

Creditor C is owed $15,000 and you are personally liable but they are willing

to settle for $5,000.

 

 Which creditor should be your highest priority?

 

A:  Creditor A

B:  Creditor B

C:  Creditor C

 

Question 5

 

You have no money for past due creditors.

Which of these is your best option?

 

A: Ignore their attempts to collect.

B: Tell them the truth and ask for their cooperation.

C: Settle with them for a lump sum payment of 10 cents on the dollar.

D: Settle for the full amount of the debt paid out over the next 24 months without interest.

E: Settle for the full amount of the debt plus 10% interest with no payments due for 12 months and then payments over the next 12 months.

 

 

 

Answers 1-5

 

1.   C 

2.   C

3.   B

4.   B

5.   E

 

Question 6

 

You’ve already settled with Creditor A for $4,000 on a $10,000 debt.

You’ve paid $2,000 toward that settlement.

It’s time for the final payment of $2,000 and that’s all you have but Creditor B who is owed $10,000 offers to settle for the same $2,000.

 

Which is your best option?

 

 

A: Give the $2,000 to Creditor A and conclude that settlement.

 

B: Give the $2,000 to Creditor B voiding the settlement with Creditor A.

 

C: Pay both creditors $1,000 each.

 

D: Paying Creditor A or Creditor B is equally good.

 

 

Question 7

 

Your credit cards are maxxed out.

Which of the following could hurt your personal credit score?

 

   A: Not making minimum payments on time.

   B: Settling for less than you owe.

   C: Making minimum payments on time.

   D: All of these could hurt your credit score.

   E: A & B only  

 

Question 8

 

You can only afford $2,500 per month to pay toward the $100,000 that is past

due with your creditors. Your biggest creditor is owed $50,000 or 50% of the past due debts.

 

Which settlement is better for you?

 

A: $25,000 payable at $2,500 a month for 10 months.

 

B: $50,000 payable at $2,500 a month for 20 months with payments

      starting a year from now.

 

 

Question 9

 

Which would you consider a high priority to settle?

 

A: The collector making the scariest threats.

B: The creditor who calls the most.

C: The creditor you’ve known the longest.

D: The debt with the highest interest rate.

E: The smallest creditor.

F: None of these are a high priority.

 

 

Question 10

 

If you make a lump sum settlement for much less than you owe, does it help your:

 

 1: Profitability?

 2: Cash flow?

 3: Credit score?

 4: Tax liability?

 

A: 1

B: 1 & 2

C: 1, 2 & 3

D: All the above

 

 

Answers 6-10

 

6.   B

7.   D

8.   B

9.   F

10. A

 

 

Question 11

 

You have not been paying your equipment lease.

The leasing company tells you that they are coming to pick up the equipment

which they have a lien on.

You no longer need the equipment.

 

 

Which is your best option?

 

A: Surrender the equipment.

B: Do not allow them to pick up the equipment until they tell you how much             you’ll owe them after they pick up the equipment.

C: Refuse to allow them to pick up the equipment.

 

 

Question 12

 

When trying to settle debts should you:

 

A: Call persistently until you get the settlement you want?

B: Call periodically?

C: Wait for creditors to call unless the creditor presents an imminent threat to            you?

D: Combination of B and C ?

 

 

Question 13

 

How many unique combinations of:

  • Bargaining power
  • Negotiating leverage and
  • Potential threats

Can a creditor have against you?

 

A: 5

B: 24

C: Over 1000

D: Does not matter

 

Question 14

 

A creditor offers to settle for payment in full over 1 year plus 6% interest. Based on your projections, you should just about be able to afford the payments.

 

Which is your best option?

 

A:  Accept the proposed offer.

B:  Make a counter offer to exclude the interest.

C:  Counter offer with a two year payment plan at 10% interest.

D:  Counter at 50% with an immediate lump sum payment.

 

End Of Qiz

 

See Full Answers and Explainations Here

 

Answers:

 

1.   C 

2.   C

3.   B

4.   B

5.   E

6.   B

7.   D

8.   B

9.   F

10. A

11. C

12. D

13. C

14. C

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