There are a number of things that can be done about debt issues both on the individual side and on the corporate side. Keynes once said, if I owe the bank a $100, the bank owns me if I owe the bank $1M, I own the bank. The point is to demonstrate that the debtor is sometimes in an advantageous position to re-organize his debt. This is the case both individually and with regard to corporate reorganization.
I have successfully reorganized many Ontario corporate situations in order to eliminate, restructure or reduce debt. In many cases debt is eliminated entirely. Businesses are properly concerned with the go-forward consequences of debt reorganization. That is a valid business priority. So is the continuing existence of your business and that often means forcing the creditors to reorganize or write off some or all of the debt. One example of this write-off strategy is the winding up of corporation #1, the purchase of distressed assets by corporation #2 and the continuing on in business of corporation #2. This process is not simple. It is not without obstacles and conflict, but it is used with repeated success in Ontario business reorganization for the last two decades.
There is another tool at the debtor’s disposal: forced negotiation with the creditor. few debtors know the existence or use of leverage in the debt context. The proper use of leverage often significantly reduces the debtor’s requirements.
The situation with individual debtors is not as fluid. There are less instruments available to the individual but still there are a number of tools at the individual debtor’s disposal assuming the debt is significant.
Below you will find examples of commentaries I have done on cases. They will give you a feel for my dealings on debt questions.
call me or write me about your debt issue.
