What options you have at this point depend largely on the severity of your financial situation and how you’ve tried remedying the problem so far.
Consult a professional, such as a financial consultant or a bankruptcy lawyer, who can help you evaluate possible strategies.
It’s generally best to communicate with the bank or lender early — long before you get any warning notices — when you’re unable to repay any mortgage or other loans for your business.
You can sometimes convince creditors that it’s in their best interest to help you. Dodging them may only scare them into taking action quickly.
If a bank thinks it will get more of the money you owe by making it easier for you to repay, it might be willing to relax your repayment terms, such as granting loan forbearance, lowering the interest rate or even changing loan covenants, says Jay Indyke, a bankruptcy lawyer in New York.
In the current economic environment, a lender might be more willing to negotiate because the pledged collateral is often less valuable to them than in better economic times.
Also consider other ways to raise the money you owe the bank. Now certainly isn’t an ideal time to borrow money since banks’ lending standards are tight.
But in better times you might have found another lender willing to lend you the money to pay off the delinquent loan.
Consider using personal money to pay down part or some of the debt, borrowing from friends or family or even finding other people willing to lend you money or invest in your business.
You also might look at selling the business, or at least selling some of the assets or real estate to raise money to pay down the loan.
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