Protect your liquid assets, if you are in default take your name off your family accounts.

First, lets understand that if you are in default, have a personal guaranty,  your liquid assets are available for the taking by the defaulted bank. Especially bank accounts, insurance policy cash values, and other subtle catches of liquidity.

The best advice is to move all your accounts ou of the bank in which you are in default with. However an area that appears overlooked too often and caches defaulting borrowers more frequently then you would guess, when banks empty joint accounts, sometimes for the borrowers children, elderly parents, or any family member in need of such support and assistance.

Heartless you say, how could they do that? Easy, this is not about doing good, it has no moral aspect, there is no judgment made, it is about collateral, default and collection. They do what they must. Likewise we must defend as appropriate.

If you leave it available it will be taken.

The latest bank trick for landlords in default.

I have seen this twice this week, its a terrific move by the bank, certainly gets the borrowers attention and causes maximum damages to the borrower while supporting the banks recovery process , maybe.

Here is the deal:

The banks are now utilizing powers buried deeply within the documents you have already signed authorizing them to pull such maneuvers, and they send a letter to each tenant requesting (demanding) that rents be paid directly to the bank.

That’s a disaster for most borrowers who are depending upon the rents for many reasons. It’s also presumably  a bonanza for the bank as it allows them to recapture cash to apply to their account, the unpaid mortgage, so goes the theory.

Worse yet, what actually happens is the tenants pay no one as they interpret this to be an open opportunity for confusion, ‘I did not know who to pay’ they exclaim so they pay no one, so no one really wins in this strategy. Worse yet, everyone loses.

What to do about it, well, in both instances I was able to get the bank to write a letter releasing the tenants form paying the bank and redirect payments to the borrower. However the deal required the borrower making monthly payments going forward. In both instances the borrower felt his relationship with his tenants would result in their ignoring the banks letter and they would pay the borrower directly anyways, so the net result was it was a bust for the bank.

The evaluation was if there would be any net left over after the payment was made on the mortgage and in both instances there would be nothing left over as vacancies were high and rents were low, thus it was a total wash… so we did not enter into the agreement and the borrower collected the rents anyways while we worked out the conclusion with the bank based on our winning strategies

But it is a dangerous strategy and borrowers who own renatal property should be aware of these strategies.

Pay attention, workouts are a tricky business. Call if you need help. Norm will arrange a no obligation conference call. 413-584-2581

Locked onto the headlights of an oncoming truck….looming disaster.

It appears to me that the biggest obstacle preventing survival of small business owners in the eroding business market, this recession is their unwillingness to change the plan…they are, like the deer on the road locked onto the headlights of an oncoming truck, frozen and unable to move waiting pending doom.

This morning I spoke with a man who owns a home that is 90% finished and in pre- foreclosure. Based on our strategies we can buy it from the bank at half its long term value after fixing and then selling. This would yield an enormous amount of cash and free him to launch a different career, one that will work and provide him with adequate revenue for him and his family to live the life they want…but he cannot seem to get his arms around selling his home and moving on…stuck in the headlights of an oncoming truck and unable to make the life changing decision that will free him.

Others are afraid to sub contract and insist on manufacturing because they are comfortable with that equation and do not want to make the big change so will die a slow death of a thousand cuts, one cut at a time, as he lives from one payroll to another.

Closing the door altogether…moving on, selling the family jewels, downsizing, doing whatever it takes to get out of the way of the truck.

What difference does it really make what you do or how you get there its the goal that counts at the moment. Short term losses for long term gains, you all know these issues…but are so reluctant to step out of the way of the truck, frozen into into inaction.

Change, Change, Change. What choice do we have. If it ain’t working we must fix it even if it means moving to Kansas…

Whatever the success formula is, and we all have one tucked away that ‘would work’ but is languishing on the back burner because we do not want to make major life time changes we would rather simply hope for a better day, maybe the recession will end tomorrow, and maybe the big order will come in today.

It ain’t going to happen Bunky, so get with it we are all waiting and depending upon your making the right decision …now, your family especially and we are all watching you and wondering what you are going to do to fix this cash flow disaster and the answer is deep systemic changes…and your stuck in the headlights frozen, waiting for the truck to…

So yes it may mean a tough transition for a brief period of time, but planning can eliminate that hurdle, the real barrier is our personal reluctance to make the big decisions to do it differently or not do it at all. Change is the big objective. Fear is the barrier.

Clear thinking my friends, pretend you are your best friend. and he is asking you for help and wants advice on what he should do to get out of his situation. Give him advice, you know all the details. Tell him what to do and then DO IT.

We are smarter then the deer frozen by the oncoming headlights of a rapidly approaching truck…DO SOMETHING before it strikes, your family is depending on it, on you, on you making the right decision…now.

Call for help, 413-584-2581 you cannot do this successfully alone…Norm will set up a no obligation teleconference to discuss your options.

When challanged by overwhelming debt, like in sports, you have to put the ball in play for something to happen.

Its true, you have to put the ball into play for something to happen and it could be very good…you must play it out. Doing nothing is fatal.

Nothing happens if your not in play. Nothing.

How does this apply to a situation when you are drowning in debt, with reduced and  inadequate revenues. A workout strategy, of course,  what other option do you really have?….none that works as well.

A workout is part science and part art form. You do owe the debt. There is no defense only reality, the facts. You are in default and have signed personally. The bank cannot be forced into a compromise, and they have every  reason and the power to foreclose and liquidate your assets by auction.

Yet if we put the ball into play, or better stated engage in a workout strategy, good things will happen. In most instances we can predict  fairly accurately what will happen. However as with any complex situation with many uncontrollable factors  involved, it is impossible to predict with exact accuracy every time what the results of a workout will be.

I do however know one thing, that every workout negotiation we have ever entered into has resulted in a huge success. Some more so then others, but all workout successfully, as long as your expectations are reasonable and flexible.

Sometimes its a clutch home run in a late inning. Sometimes it’s a three pointer at the buzzer. Other times its a bunt, a walk or a stolen base…manufacturing  runs and a win…But in the end a Win is a Win, however we get there.

The point is, when being crushed by debt, your only viable plan of action is entering into a workout. One must believe and have faith. Trust your representative, your workout expert and watch him go to work.

No guaranties, but most assuredly you will be pleased because once we put the ball into play…we will score. We will win…we always do.

You have to put the ball into play to win for debt forgiveness to occur. It takes skill, experience and expertise…patience and determination, timing and subtlety, combined it yields a win. You can understand the principle, the concepts, the strategy and the numbers, it may make sense, but remember you signed the note, the bank lent you the money,you have personally guaranteed the debt, all is at risk, and they expect you to pay it back.

…and your expecting  the bank to forgive the debt?…it sounds silly. It is silly, it makes little sense when properly evaluated…but we believe in the workout and convince the banks to forgive the debt as it is in everyone’s best interest…amazing. We put the ball in play and good things happen. Not always predictable, but always a win.

It’s not normal business. It is as it is called ‘upside down, under water,’ It is part science part art form…find an artist, a workout artist and let him do his magic…it will work, he will put the ball  in play and find a way to win.

Call us for a candid discussion, 413-584-2581 Norm will arrange a no obligation teleconference, just an exchange of information and a view into what can happen if you put the ball into play.

Do it, what option do you have? Have faith. It will work out.

Should I start a new business in the middle of a recession? Of course!!!!!

Would I start a new business in the middle of a deep recession?

Absolutely, but very carefully; a very well planned and innovative business.  A business focused on the market’s realities, and delivering to that market exactly what it wants/needs…today.

Do a careful analysis of how the business model is typically being done, and then stream that model as much as possible.  Use fixed price sub contracts, rewrite leases and explore re-inventing your business model to yield a better product at lower volumes with higher profitability and controlled costs.

That’s the recipe.

Keep in mind the challenge for an existing business is learning how to downsize and reinvent themselves in order to work effectively in this recession, with decreased revenue and increased costs.

Its hugely different when one is starting up in such an environment as the business plan simply reflects the current situations, and thus the start up plan is set to win within the current parameters.

New businesses should have less a problem figuring out how to do it, operate profitably under current circumstances,  existing businesses have to change their ways and that is a lot tougher goal to accomplish.

Careful consideration of a lot of the competition remaining, businesses that are doing it the old way while trying to make this difficult transition, reacting by limiting their marketing efforts as they make their adjustments, and thus allowing the competition (you) to gain ground and claim a larger share of the market place; and allowing the new kid on the block to ‘beat up’ on the non-responsive, existing, old school businesses, who are hiding out -waiting for the black cloud to pass- and trying to figure out how to do it correctly in the down economy…while you hit the road running.

The glass is either half full or half empty and the results will follow the attitude.

The new guy looks at the current economy as today’s economy -not down -nor up -just what it is…and makes his plan accordingly.

Please!  Calling all entrepreneurs…open up… now, don’t let the current condition of the economy stop you.  There is a welcome and open door for innovation and better execution…come on in, the weather is great, the water is warm.  The profit potential is rich.

It’s a HUGE opportunity for those that know how to do it… correctly.

Call my office at 413-584-2581 if you need help, Norm will arrange a no obligation tele-conference for us to discuss your options.