Need to workout defaulted debt with your bank? Stop believing your banker.
Enough, your banker is your opponent. He/she is committed to collect all you owe. This is not the person you want to seek advice from, no matter how close you have been and how helpful he has been in the past. He is not the one to get advice on what to do when you are either approaching default or in default. He/she works for the bank, not you. His/her job is to collect not support a workout.
We hear what we would expect to hear:
“You must pay, there is no workout available” — RIDICULOUS!
“Sell your home” — NO!
“Withdraw your retirement account and pay us” — NEVER!
“Borrow from your parents” — NO!
“Do not pay others, pay us. Give us your accounts receivable collections.”
This is self liquidation, be careful! This is appropriate at some point but not usually when the bank suggests it. If you are still operational you can and should apply your accounts receivable in the best interest of you, not the bank.
FAR TOO MANY BORROWERS BELIEVE THEIR BANKER IS GIVING THEM GOOD ADVICE AND FOLLOW IT. It is very unlikely.
You must understand that their advice is not in your best interest once you are in default danger or in default. Get outside assistance. Get experienced consulting from experts who concentrate on bank workouts, as they will know what’s right and what works.
Do not do it yourself. Do not listen to those who will give you bad advice. Get help.
Obtained SBA loan in 2001. $70,000 startup and $25,000 line of credit from Bank One. Business did well until 2 main clients went under and left me in $60,000 in receivables. I filed suit against them and offered Bank One all of the receivables and asked for an amounjt to pay off the loan. They refused my offer. Then Bank One intervened and took over the suit and settled for less than 50% of what was owed.
Then Bank One went under and Chase took over the loan. I offered to pay the difference but chase has for over 5 years refused all offers to pay and will not even give me an amount of what I owe. I was forced to file personal bankruptcy but Chase had placed a lien on my home. I offered to refinace my home to pay them but they just refused to even respond to me. The law firm representing the bank has collected a lot of money in fees from their client and keep gouging them. Can I circumvent the bank and go right to the SBA to settle?