Debt Workouts Can Be Enormously Successful:$1,037,000 settled for $20,000… 2%!!!

I recently achieved a $20,000 settlement paid out in monthly installments for 5 years to settle $1.037 million!

This client originally came to us with a business that had lost millions of dollars in revenue in just one year. Their business model, which had once been innovative in their industry was now obsolete, and they had been forced out of the marketplace. We worked with the bank in order to wind down the business and liquidate all assets for their benefit. What resulted was an outstanding personal guarantee of $1.037 million, which fell onto my client personally. As they had invested every penny they had trying to keep their business viable, and were completely upside down on their mortgage (as so many people are these days) we were able to work with the bank and the SBA in order to represent that all my client could afford was to pay $20,000 over the course of 5 years, and nothing more.

At first there was some push back on such a low offer. I engaged in multiple negotiations with the bank and the SBA, and successfully argued that my clients were  “judgment proof” and that it would cost the bank and the SBA more to pursue them legally than they would ever collect.

In the end, logic prevailed and the SBA accepted the fact that pursuing my clients legally would be fruitless, $20,000 was all they would be able to afford, and the offer was accepted.