What not to do in a debt forgiveness workout negotiation, and we see it all the time.
Business owners like so many people, make basic errors in the negotiation process which have serious detrimental effects on the outcome. Here are a few I see over and over.
Failure to communicate. People tend to hide out; not wanting to confront uncomfortable situations, preferring to ignore it, possibly hoping it will go away. It won’t go away and failure to communicate only makes the situation far worse than it has to be. Respond meaningfully and on time. It is the only strategy that works.
Hiding information, refusing to provide requested information. This too can be fatal to your cause. Eventually the truth comes out. If not then inadequate reporting will result in an unsuccessful workout as this error allows the lender, workout officer to make whatever judgments he/she chooses and can get away with it because you failed to provide what was asked for. Worse yet, they assume you are hiding information and thus look questionably at everything else you have provided. Actually what happens in such a situation is no workout will occur at all, as insufficient reporting will result in a full payoff demand.
Worst error is to lie. This will be discovered and then all is lost as nothing you say will be considered credible once a lie has been discovered. Don’t do this, it is fatal. Some believe they will never find the truth out. They will, the truth always emerges. Somehow everything that is important surfaces and is revealed. If you hid it, or lied about it, and it is discovered, you are doomed in a workout situation.
We tell our clients to tell us all, we can prepare for anything if we know what we are preparing for. Most any situation can be presented in a light most beneficial to a positive conclusion…if we do not know we cannot prepare.
Do not ask for or expect the impossible. This is also a failing approach. One must be realistic about a workout. I see business owners requesting impossible workout solutions. This impedes progress and is likely to result in a poorer conclusion than could have been reached had the borrower been more realistic and aware of the guidelines for the process. Get guidance, it makes sense.
The best advice I can give is do not do your own workout. Get expert advice. It can be fatal or at best not as successful if you attempt to do your own workout. There will be a conclusion but it is unlikely it will be the best possible conclusion.
