Financial institutions have a greater interest than ever in recovering delinquent loan amounts. Although defaulting on a loan is typically only a small part of a bigger financial problem, a New Jersey banking law lawyer can be instrumental in maximizing the potential recovery.
Negotiating with the Borrower
Initially, it is prudent to determine if some restructure of the agreement can provide a mutually beneficial compromise. Such options as lower payments over a longer period of time, forgiving some payments currently for extending the loan term, lower payments in exchange for a higher interest rate or some other form of refinancing can be considered.
The Debtor’s Solvency
Filing a lawsuit against the borrower may result in a judgment that can subsequently be enforced. However, strategically, it is important to know the financial status of the individual; delaying filing suit too long can mean there are no assets left to attach to satisfy the judgment.
The precise nature of a guarantor may be different in various contracts, but they have the same legal obligation to the debt as does the primary borrower. Consequently, a creditor may pursue the full range of collection activities against the guarantor as soon as the loan goes into default; this includes the filing of a lawsuit.
Contact New Jersey Banking Law Lawyer for Legal Advice
Regulatory rules and regulations are constantly changing, and it is critically important to be in full compliance with all collection matters. For questions on any collection issues, call Snellings Law LLC at (973) 265-6100.