When you are captaining a company and see the financial equivalent of a trove of jagged rocks and currents – or even a waterfall – in the distance, the experience can prove extremely stressful. So, if you find loans and debts that you will have immense difficulty paying by dates x or y, make sure you know what your options are. In this article, we help break down commercial loan workouts, debt restructurings, and more to assist you and provide clarity.
Located in Wilkes-Barre, PA, our experienced team at Hoegen & Associates, P.C., can help organizations find the best solution. We are versed in both Pennsylvania and federal laws. Reach out today.
Commercial Loan Workouts
When a business finds it increasingly challenging to pay off a commercial loan, a loan workout can help. A commercial loan workout entails a negotiation with the lender to avoid bankruptcy. It can typically involve securing a forbearance agreement, which helps stabilize the situation for the borrower so that a solution is put together. A number common strategies or tools can make up that solution, including consolidation of debt or entities, sale of assets and asset-based, or “ABL,” lenders, and other pieces.
A knowledgeable law firm can help prevent you from paying a great deal more in money, should you choose less experienced counsel or take a chance and attempt to sort out the loan alone. Caring and trusted, Hoegen & Associates can help a business know their options and we can put together a trusted solution in dealing with debts.
Debt consolidation entails combining multiple debts into one. The debtor can borrow one loan and make a single monthly payment to the creditors, rather than juggling several. Debt consolidations can lower interest rates, making your payments less burdensome.
This option is great if you’re a business owner with multiple debts and creditors knocking at your door for the money. However, if there is a longer window for making the payments when you decide on debt consolidation, keep an eye on the details to make sure you’re not paying a crippling amount that is more than the life of the loan.
Another option is debt settlement, in which a lump-sum settlement or payment arrangement is made with the creditors. The aim is to lessen the debtor’s obligations. This route requires a bit of extra research and care, in part, because debt-settlement companies have drawn controversy. Such a company can negotiate with creditors for you with the aim of letting you pay a lower “settlement.” Yet, you typically have to add money to a special account for a period of time before the debt settlement is reached – and sometimes the settlement has not been reached.
A Team of Experienced Problem-Solvers
Hoegen & Associates can help businesses navigate bankruptcies, commercial loan workouts, and more. We bring decades of experience in the law and pride ourselves on our dedication to excellent client service and being easy to reach. Do not take on such a stressful period without help. Know your options. Avoid common pitfalls. Reach out today.