# Would the bank settle for reduced amount of debt and how much?



## seadog (9 May 2010)

I have a debt of 600,000 with a commercial bank,they have refused to accept interest only and now want the loan totally repaid or they will start legal action.The money was borrowed for a land acquisition and the land is now for sale but with no buyers and the value is now around the 400,000 if that?If I was able to get an investor would the bank settle for a discount on the loan amount,Thanks for your help.


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## whitegrass (9 May 2010)

This is a very relevant question.  In all likelihood this is a full recourse loan.  Do you have other assets and income?  If you do then the likelihood of a settlement are decreased.  I believe that deals will be done in the future but banks, in my experience, are not doing deals at the moment.


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## seadog (9 May 2010)

Thanks Whitegrass,The Question is whether they would accept 400,000 now or bring me to Court and get a Judgement with the chance of no money down the line,the loan has a personnel guarantee but with no assets, so if the Bank wants to recover the principle the offer is there but the investor will  not hang around for long.


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## Brendan Burgess (9 May 2010)

Is the loan not secured on the land? 

If you owe the bank money and you have assets, the bank will seek to have the full loan repaid. Why on earth would they not want their money back? 

They will get a judgment against you. They will seek to enforce the judgment. The courts move slowly but surely and they will get their money back.


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## seadog (9 May 2010)

Brendan,Thanks for reply.The loan is secured against the land and the loan is in  my name and I dont have any tangible assets,the land is now worth a % of what it was worth years ago and I have an offer from the auctioneer for 400,000.The Question is ,would the bank accept the offer of 400,000 or would they go to the expense of Judgement,end up with the land and then they would have the hassle of trying to sell it themselves.Thanks


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## Brendan Burgess (9 May 2010)

The bank should agree to the sale of the land for €400,000 if they think that it is not worth any more.

Of course, you will still owe them the €200,000 and they will want your proposals for repaying that.

Brendan


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## bond-007 (9 May 2010)

Of course they will settle for less than the full amount. They will want to get a judgement before they will talk about settlement.


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