We are all imperfect.
We sometimes make bad decisions. We sometimes do not know information we should know. We make mistakes. We frequently keep poor records. We occasionally communicatete poorly. We practise avoidance. We breach our word. We hide. We are all human.
In workouts with your bank and others, we tend to increase the damage by continuing these ‘bad’ business practices.
Then we compound the issue by promising the impossible, projecting unrealistic turnaround results and when we fail again. We get more defensive and more apologetic and onward the cycle continues eventually destroying all credibility and with it reducing the likelihood for a best case work out conclusion.
I have been there and have seen this repeatedly.
Recently I arranged a client discussion with the bank workout officer who wanted to find out what happened and what the borrowers plan for payback and resolution. He insisted in interviewing the borrower directly.
My client had made mistakes, had communicated poorly and was out of touch with her business. She was distracted by personal issues and frankly did not know what was happening, had no plan for debt payback and was struggling with the reality of losing it all.
Prior to the meeting I coached her urging her to follow one simple guideline and assured her if she dd this it would be a more successful meeting with a more successful workout conclusion, as we would regain the trust of the banker.
The rule I suggested was…’tell the truth, no matter what it is’. If she did not know the answer to a question do not make it up, tell the banker you have no idea. If you made mistakes and decisions were inappropriate or simply wrong, admit it, accept it, and disclose it truthfully. If you have no plan or strategy, admit it.
So we had the meeting and she treated the situation with candor, integrity and honesty, telling the banker the truth instead of what she thought he would want to hear. No one was happy with what was happening but the banker appreciated the candor and the truth and rewarded us with cooperation and support despite the disastrous losses we were all experiencing. She admitted her errors and accepted the reality of the situation and with such candor won the cooperation of the banker which was sorely needed to yield an effective workout scenario.
Even in my coaching she wanted to make things up and sway from the hard truth, yet fortunately I convinced her to come clean and she did. The reults were positive.
I am certain many of you in defaulting positions are also avoiding the bank, hiding the truth and trying to project an unlikely positive resolution to keep everyone happy as you fail miserably.
The point is, it is better to face the music and deal honestly and candidly, it works out better in the long run.
This does not mean we should not arrange your affairs appropriately in your best interest nor protect yourself as deemed appropriate. It does mean that once done you should present yourself to the bank candidly and completely, honestly and clearly accepting your responsibility and disclosing the ultimate failure of the situation.
This is the only way to begin and end a successful workout.
