If you own commercial property and are facing possible foreclosure, there may be other options. You could consider recapitalization, refinance your debt, or restructure your debt. The following four tips can help you avoid commercial property foreclosure.
- Consider Recapitalization
Generally, the original loan maturity date and interest rate stay the same in recapitalization. The loan is amortized, and a new monthly payment is derived. If the lender agrees, this is a great option for avoiding foreclosure and bankruptcy. It’s an appropriate way to proceed if you can make a monthly payment but are unable to catch up on the past due balance.
- Secure Refinancing
With debt refinancing, a new loan is secured and used to pay off the existing loan. This may help improve your credit score because the original loan is reported as paid in full. It’s most helpful if the new loan has better terms than the original loan. If so, you may be able to decrease your monthly obligation and save money over the life of the loan.
- Restructure Your Debt
If other avenues are not available, restructuring may be an option to explore. When restructuring a debt, the borrower negotiates with his or her creditor to develop an agreement that benefits both parties. Most lenders want to work with a borrower who is attempting to restructure in good faith. They know that if they don’t work with the borrower, he or she is more likely to file for bankruptcy. Some ways a loan can be restructured is extending payment dates, waiving late fees, and modifying the frequency or amount of payments.
As upsetting as a possible foreclosure is to a homeowner, the stakes are usually much higher for a commercial property owner. Many commercial property owners own the property that houses their business. Losing the property could mean closing the business and laying off employees.
- Contact a Foreclosure Attorney
If you own a commercial property and you’re struggling to stay afloat, contact a foreclosure attorney who can help you navigate the financial complexities and negotiate on your behalf. The stakes are too high to leave it chance. You need an expert on your side.