The post Debtor/Creditor Negotiation Strategy: Under Promise And Over Deliver appeared first on Baltimore Bankruptcy Lawyer.
]]>This is important because lenders don’t like to negotiate against themselves and recognize that debtors have a much stronger grasp on their cash flows, their operations and their ability to repay the debt.
Commercial lenders also recognize that debtors can more easily modify loans in bankruptcy when the loans are commercial loans, so they also want to stay out of bankruptcy if possible. Loans secured by home mortgages that are the debtor’s principle residence are not subject to modification in a bankruptcy proceeding unless the lender consents.
So how does a borrower go about obtaining a loan modification in a commercial setting? The process generally begins by debtors making written proposals to the lender. It is important that in these proposals the debtor promises to make payments that are in line with what they can afford, not what they think the lenders want. If a lender is willing to undergo the time, effort and expense to negotiate and draft a forbearance or modification agreement they don’t want to face an immediate default by their borrower. That’s why borrowers need to be realistic in their promises after default so that they can rebuild credibility and a constructive commercial relationship. By promising only as much as they know they can deliver debtors are much likelier to have a successful negotiation and a happy creditor.
The post Debtor/Creditor Negotiation Strategy: Under Promise And Over Deliver appeared first on Baltimore Bankruptcy Lawyer.
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