N.C. A&T chosen for bioengineering centerGREENSBORO — N.C. A&T State University is one of a select group of universities nationwide, and the first historically black institution ever, chosen to lead a prestigious National Science Foundation Engineering Research Center.
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need to be exchanged and maintained in order to reach equitable debt settlements. Broken promises in the past, lack of clear goals or a clear reorganization plan, unanswered inquiries, etc. damage credibility and slow the process. Negotiators need to maintain creditor respect, and reestablish the credibility that has been lost by the debtor.
Legal Variables. Every creditor and collector has a wide range of legal options in trying to collect their money--everything from doing nothing to winning a judgment and seizing assets. A good negotiator knows each creditor’s exact position in the collection process. Negotiators know that creditors will be considering, among other things, whether or not the debt is in suit, if the debt is disputed, if the debt is secured, if bankruptcy has been filed or contemplated, if they are the original owner of the debt, the collectability of the debt, etc. Negotiators should always factor in the costs of legal action in their analysis.
Collection History Variables. The history of a debt account is important to the creditor's collection stance. Variables such as prior collection efforts, the number of prior collectors, the age of the debt, prior offers and demands, etc. help creditors decide how to proceed. Some collectors have set rules provided by creditors for collection, while others have more internal flexibility to fashion settlements and solutions. As a negotiator, try to gather information about the creditor’s limits, payout terms, willingness to settle, etc., while maximizing the use of the collection history data to turn the creditor towards a reasonable solution.
The above list of variables is not meant to be complete, and there are secondary variables (the discussion of which is beyond the scope of this article) that can come into play during negotiations.
The negotiator’s strategy is to use the above variables as a “system” to provide creditors with lots of accurate information about the business’ problems, so that the creditor will be most informed of how dire the cash flow is, how burdensome the debt load is, how repayment cannot be made, how operating expenses are not being met, etc. Typically, there will be two outcomes. Creditors will either agree to settle debts for less than is owed, or they will agree to extend the time in which they are paid. Either way, an efficient debt negotiator will allow a business to allocate more resources towards increasing revenue, as opposed to wasting resources on debt load it cannot pay.
Which option a creditor decides to take is dependent on each particular debt and each particular creditor. There is no steadfast rule as to what a creditor will do. Some debts are just recently delinquent, while others have been through litigation and have judgments entered. Some debts are unsecured, while others have an asset pledged against them in case of default. Some creditors are in deep need of the money, while others have deeper financial reserves. Good debt negotiators will balance creditor “wants” with debtor “needs”.
Mastering the debt negotiation process begins with understanding the "ins and outs" of these factors. Using the strategy mentioned above will certainly influence a creditor’s decision-making process, potentially saving a lot of money for debt-strapped businesses.
Article Source: http://articlecrazy.com
RESOURCE BOX :
This article was written by Christopher M. Lee, vice president of www.debtassociates.com”>Debt Management Associates, Inc. Mr. Lee has 18 years of debt negotiation experience. For more information, go to www.debtassociates.com.
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