Write the Check

More and more clients are having difficulty adjusting to a very basic principal of a workout scenario.  Workouts are not a get rich quick scheme!  Most people who enter workout have nothing and no way to get enough to survive.  That is why we do what we do.  We are here to save a business, a home, and probably a family or two with our clients.  We are not here to hide assets from the bank so you can choose to default if you can afford to pay your note.

This is not to say that a client cannot come to us with assets if they see the cliff ahead and want to avoid catastrophe.  We always do our best to secure assets and protect as much as possible, but I felt the need to write this post about a saying that I truly hate, “Write the Check.”

I personally despise giving any victory to my opposition, but there are times when our clients need to pay a creditor.

If you are in workout and you hold a big portion of equity or hold major assets like one hundred thousand dollars in stocks or life insurance policies, the best possible plan may be to write the bank a check.  If you owe over a million dollars and you have to pay one hundred thousand to account for an asset that could not be protected I would think that client would be happy, and most times I would be right, but there are many times that this client has seen us push through the entire workout and deliver impossible results and believes that we can make up any number and make it work.

Our workout process is based on two things, transparency and factual supporting of our numbers.  If you are paying pennies on a dollar, it is because we proved you do not have assets and the number is correct.

One of my current clients has fallen into this trap and just today came to the realization that they must write a check to move forward.  They felt a natural high from the previous low dollar settlements and felt that this number was too high based on an emotional response to our success instead of thinking about the facts.  Tomorrow this client will complete this portion of their workout and move on because they made the smart choice to write the check instead of wasting precious time arguing which we may not be able to get back.