Silence From The Bank Can Be Golden
It’s true, banks can put your defaulted loan workout on hold for long, long periods of time, with seemingly endless delays. There are many reasons for silence from the banks once you have gone into default but this is not necessarily bad news.
Sometimes it is merely a function of too big a backlog, too many files in line ahead of you, and you must wait your turn. But really, what is the hurry? Yes, I know you want to get on with it and figure out what is going to happen. You stress over it and knowing you are in default is not a good place to be. You call and call and write and complain but for what reason? To get closer to the gallows? Frankly, it is not all that bad a situation and just as frankly, you can do little about it.
If you are operating and not paying your debt service, and therefore benefiting by not expending this cash, you have an opportunity to figure out how to emerge, how to make the transition, how to downsize into profitability, how to reinvent yourself and change your situation so you can succeed in this economy. (A word of caution, however, if you make the changes, when the bank arrives at your doorstep you may have a major league issue with a valuable transitioned going concern now at risk, but that’s another issue altogether.) The bottom line is that you should use your time effectively. If the bank is not responding, don’t try to interpret the reason, simply use it to your advantage.
Some other reasons for the long silent delays? The analysis may be that your file is not worth the effort over other files. Again, no big deal, it is to your advantage for this time to lapse as you figure out what to do next. Delay could be due to high debt/low asset value. A simple analysis may tell the banker that the time required to work out your file is not worth the effort as the asset base is small compared to the debt, making it less important to the bank.
In short, there are many reasons that could cause a long delay, none of them relevant to the issue. If you are in default and the bank is ignoring you, let them. There is no point in hurrying them. It is a futile effort that will cause you more stress and as long as you are not paying, what’s the point? Long time delays, while sometimes stressful, are actually to your advantage.
