Commercial Loan Workouts Offer Businesses An Alternative to Filing Bankruptcy
If you are struggling to pay off your commercial loan, you may want to consider a commercial loan workout, also known as commercial loan reduction. This refers to the process of working with your lender to come up with a settlement amount that you can afford. The goal is to negotiate with your bank to get it to accept a much smaller sum than your original debt as payment in full – thereby eliminating the business debt.
The negotiation process can be complicated. Our attorneys are experienced at commercial loan workout and business debt settlement. We negotiate for large principal reductions and eliminate debt without bankruptcy. The attorneys at McCarthy Law will help your negotiations go smoothly and will be sure that you get the best deal available.
When to do a commercial loan workout
Banks are less likely to negotiate well secured loans. Commercial debt settlement & loan workout is most likely to succeed if you have some unsecured outstanding balances, you are behind on a few months of payments, you are unable to repay your debt, but you will be able to repay if the debt is significantly reduced. By “unsecured debt”, we mean that the loan is not secured by property (usually real estate) or it is technically secured by property, but there is no equity, making it effectively unsecured. This often comes up in second or third mortgages and SBA loans. We perform loan workouts and debt settlement without the need for bankruptcy.
You will be most successful if you appeal to the lender’s best interests. Our experienced attorneys know what the bank wants and excel at persuading the bank to accept large reductions in loan balances.
Why hire an attorney for commercial loan negotiation?
It may be tempting to try to negotiate a settlement with the lender on your own. But our experience is that clients almost always end up paying far more to the bank than if they hired us. If you only have one small loan, under $10,000, you could try it. But if you have a larger amount of debt or several creditors, you will save much more money and time having an experienced loan workout attorney on your side.
Besides having a greater chance of success, attorneys are also beneficial when communicating with collectors. Consumer debt collectors are governed by the Fair Debt Collection Practices Act, which forbids abusive behavior such as excessive calls, calling after 9 p.m. or before 8 a.m., or discussing your debt with anyone other than you, your spouse, or your attorney. Unfortunately, these laws do not govern commercial debt collection. But, many states do have licensing requirements for commercial collection firms and other safeguards in place to make sure you are not facing abusive behavior while dealing with your commercial debt. Licensed attorneys are familiar with these laws and will make sure that your collectors are obeying them.
Commercial debt can cripple your business, but the quicker you deal with it, the easier it will be to manage. Contact the lawyers at McCarthy Law to get a professional on your side when eliminating your commercial debt. We offer a free consultation with a lawyer.