$200K lease obligation settled for $5K

That’s right, $195K in debt forgiveness, a 2.5% settlement… Seems too good to be true

Working with a client who has a $200K+ SBA loan with first position on all of their assets, we recently had an issue with their landlord.  He was owed roughly $200K and was upset and emotional over the fact that he was not getting paid.  When I initially called him and told him that my clients could not afford more than $5K to settle the debt in full, he laughed and was insulted.

Instead of giving up, I put together a financial package, along with UCC and Lien filings that proved my clients situation with the SBA.  I went further to explain to this man that he refused to settle that my clients would eventually be forced into bankruptcy, and because of the SBA security position, they would receive all fund from any liquidation that would occur in bankruptcy, leaving nothing for his unsecured debt of $200K.

The presentation won.  We settled for $5K.  Where most would give up after the first phone call, we did not.  When you present all the facts and alternatives to creditors and work with them, all they have to do it review and verify the information you send them, instead of them fishing around and spending money to collect this data themselves.  When they review the full financial position of a borrower in default, they make a business decision: Spend money on my attorney and likely get nothing in return, or take this offer and cut my losses… The choice it obvious.

Creditors seldom want to push clients into bankruptcy, it often will yield them nothing, and the results and payouts will take months… Working with skilled financial consultants experienced in debt workout brings a better return for all involved… both borrower and lender