How to Face 63 Angry Creditors

Owing money is the worst. Owing 63 vendors a combined total of $500,000 is an entrepreneur's worst nightmare.

This is the situation I found myself in when I took over as president of a Philadelphia-based multimedia company.

After a month with the company, I discovered that all our vendor payments -- some of which amounted to over $50,000 -- were at least 90 days overdue.

Worse, many of the vendors had turned over our account to debt collection agencies that called daily demanding payment -- some with stern warnings and others with Mafioso-like zeal.

Take Abuse Over Litigation

We received 13 letters from lawyers and collection agencies threatening to take us to small-claims court.

This course of action would cost me astronomical legal fees if I appealed and would cost me my business if I didn't.

Determined to keep the courts out of it, I did the most uncomfortable thing possible: I called every creditor to confirm how much I owed them.

Ignored until this point, my creditors called me a crook and demanded payment.

I let them vent their frustrations and didn't offer excuses. It was humbling, but it kept me out of court.

Open Wide

To regain the fragile trust of our vendors, we did what every business balks at: We threw our doors wide open.

Creditors were invited to our offices, shown our business plan and presented with our financials. I worked with each of them to set up a payment plan.