Creditors Are Suing First And Talking Second
A direct result of the crumbling economy is an expectation and anticipation of massive default occurring all over the marketplace. It is now simply assumed that if someone is in default in one area for one creditor, they are probably in default in all areas, so now the lawyers want to shoot first and engage in a race to the courts to get first in line so their client’s judgement takes a higher priority. First in line, first in time. When it comes time to distribute liquidated assets everyone wants to be first. Thus, they skip the workout and go right to judgement, fearing some other creditor will sue first and win.
Previously, we would have had an opportunity to talk, negotiate, work it out, schedule payments, wait for specific events to occur and engage in meaningful workout discussion. Now there is less talk, no negotiation and no workouts in many instances until after the lawyers get a judgement and secure their position. The lawyers now tell their clients they should expect collapse of the debtor and need to act first and talk second. There never will be a workout discussion.
The problem with this theory is that it acts as a catalyst for liquidation, not workout negotiation. As other creditors instruct their lawyers, or other lawyers instruct their clients to follow the same logic and do the same thing and as the lawyers fight for position the only act remaining is for one of them to begin the liquidation. One of the creditors will make that decision once all the creditors are lined up and the net result will be no discussion, no workouts just liquidation as all will follow suit.
It’s an emotional stampede led by the lawyers, pretending to do what’s in the best interest of their clients when in all reality they’re simply creating an atmosphere of destruction with little room for workout discussion and no good results. Once they all sue all that remains is to cut the client up and bury the body. It’s like a gang movement, or a crowd decision; one person starts it and everyone else follows turning the tide in whatever direction the crowd is moving.
What do you do to combat this?
You must get in front of this massive liquidation train and do your workouts in advance of the lawyers taking control. This is your only option – to take control of your destiny in such a desperate market and do your workouts in advance of the lawyers liquidating you. It’s getting nasty out there and no one will really win; greed prevails and thus everyone will lose.
My response is simple. Do a preemptive workout. Call a workout specialist and fight fire with fire. There are strategies to circumvent this problem. Mere talk is now inadequate. Act first protect your assets and do the preemptive workout or suffer the consequences.
