Hello, I took out a commercial loan from my bank in 2007 in the amount of 135k. My monthly payment is $10110.80 with P & I at $1581.15 and property tax escrow of 8529.65. In 2011 I missed two payments in March and June, made consecutive pmnts July thru Dec but then missed a payment in Jan and March of 2012. My last payment was made in April. Last week I recieved my statement in the mail showing a past due amount of 29,975.00 and total payment due of $40,085.00. Then on Friday, May 5th I recieved a certifiied letter from a debt collector (retained by my bank) demanding full payment on the balance of the loan for $85,470.00. I was very shocked (and scared) by this considering I never recieved not one notice or phone call from my bank telling me I'm in default or even "warning" me of further action. With that said, I have a few questions: 1) Is it still possible for me to negotiate with my bank? I can pay them the $40k within a week and bring the loan current. 2) Can the bank take the loan out of collections or is it too late for that? 3) Is there a certain process or steps that a bank has to make to notify me before it goes into collections? (which they did not do). I hope my questions make some kind of sense. I do not know what my next step should be and am very nervous about all this. I look forward to your professional advice and information.Thank you very much.PeterElmwood Pk, Il.
Country relating to Question: United States
State (if USA): Illinois
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Thank you for your question, Peter.I will do my best to assist you, although please be aware that while we can provide you with information, if you are seeking actual "legal advice", that has to be obtained from your local attorney. Please permit me to respond to your questions:1) Is it still possible for me to negotiate with my bank? I can pay them the $40k within a week and bring the loan current.Yes, you can still negotiate. However almost all loans have an automatic "acceleration" clause that once and if you fall behind, the full loan is due. You absolutely can contact them and ask if they are willing to allow you to make the loan current so that you can catch up (and they get funds), but at this point that would be obtained solely at their discretion. Most lenders prefer this method as it saves them attorney fees and court costs.2) Can the bank take the loan out of collections or is it too late for that? Yes, they can always choose to take it out.3) Is there a certain process or steps that a bank has to make to notify me before it goes into collections? Not on a commercial loan, the moment you fell behind the loan could be accelerated, and the lender would be free to collect themselves or get a third party to collect for them.Good luck.Dimitry Esquire41036.1472241898
Thank you for your answer. Just to clear up something. If the loan DOES have an acceleration clause, can I still negotiate or is there no chance of that happening?
Thank you for your follow-up, Peter.You ALWAYS have the ability to negotiate. The bank always has the discretion to waive their own terms in their own agreement. There is absolutely a chance of that happening since such a negotiation may end up saving the lender money on fees to collection agencies and other third parties.Good luck.Dimitry Esquire41036.1673458681
JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin
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