Loan Workout

I had a commercial loan on a small apartment house during the banking crisis of 1990-94 which declined 80% from appraised value.  By knowing the bankruptcy law and knowing how to negotiate I was able to reduce the loan without tax implications.  It protected my house which was at risk due to mingling the collateral. I have access to the same resources and would be able to evaluate your situation to see if my experience is applicable. The basic plan is:

1. Don’t pay the loan but instead pay operating costs and put excess into a private account as a war chest
2. Let the lender contact you and explain the situation -don’t be afraid to cry pour mouth and put some fear into them
3. See if the lender will let you sell privately and get an agreement they will not chase you for the shortfall. They may once they know you are serious
4. Use your war chest to make your property salable and prepare to sell and take a hit
5. Communicate the low offers to the bank and help them prepare their write off
6. Look at IRS Section 108 to take any debt forgiveness as accelerated depreciation