When the bank refers the account to a law firm, HOLD PAT!

We see this all the time – when borrowers fail to respond to attempts to communicate from the bank, when they are x amount of days in default, SOMETIMES these files are referred to law firms to handle and service. From my perspective, it’s a way to A. Satisfy the SBA’s requirement that the lender exhaust all measures to collect, B. Send a strong psychological message “we’re not messing around here!” For example, a client of mine recently had their account referred to an attorney, who sent a nasty message on his letterhead to the borrowers. When I spoke with the attorney, he said “I figured the letter would get a response quickly.” Textbook scare tactics here.

Here’s a little inside information: often times these law firms deal with borrowers in default much more logically and efficiently than the bankers who sent the file over. I’ve had a multitude of success dealing with lawyers who completely understand the situation and the fact that we HAVE A SOLUTION THAT WORKS FOR EVERYONE. They are free from the emotional influence that the banker may have had in dealing with the account, and furthermore can MAKE THINGS HAPPEN very quickly.

In the above referenced scenario, the attorney is now working on our terms.. now that he understands what we’re proposing, he’s fighting for us in convincing the bank that our solution DOES work for everyone.