(309) 699-4691 tom@stumari.co

Commercial Loan Workouts

Loan Modification Lawyers

Located in Peoria and serving secured creditors all over Illinois and the United States, attorney Thomas Howard has helped clients with straightforward commercial mortgages to the most complex participation agreements.

No one likes when loans go bad. When a borrower defaults, the lender (the bank) has risk too.  The Risk of loss is not a safe and sound banking principle. There are ways to avoid this risk and the most common one is known as a loan workout or loan modification agreement.

Thomas Howard has helped countless financial institutions fix problem loans, but now also assists borrowers requiring negotiations.   Call (309) 699-4691.

Thomas Howard

Thomas Howard

Real Estate Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

What is a Loan Workout?

A loan workout is a new agreement between the borrower and lender that changes the loan.

Many times the borrower in distress needs additional funds because of problems arising from its business and benefit from a loan restructuring.

Some of the most common modified loan terms include:

  • Payment amount. The parties can agree to temporarily decrease or pause the amount due in return for an increase in the payment later in the life of the loan.
  • Payment dates. The parties may also agree to temporarily pause payment dates in return for an increase in later payments or an extension of the payback period.
  • Maturity date. The date when full payment is due may be pushed back to a later time.
  • Interest rate changes. The amount of interest charged on the loan may be reduced.
  • Sale of property. A loan workout might call for the sale or liquidation of a property in lieu of foreclosure. 

How Do You Get A Loan Workout?

In the new agreement, the debtor’s attorney would ensure that the workout would solve the problems that the borrower is facing.

A borrower should contact a loan modification attorney as soon as possible in order to resolve any financial issues that the business may be facing before the problem gets worse.

A workout plan would then be proposed once the debtor’s attorney has reviewed the borrower’s financial condition based on the information provided by the borrower.

Any negotiation process requires the expertise of an attorney who has experience in loan modification because commercial loans are often very complex.

When restructuring a loan, there are some legal issues that would need to avoided.

If a business is ultimately forced into bankruptcy, the loan modification must avoid any so-called preference problems—a situation in which a creditor receives favorable treatment at the expense of other creditors.

Counsel for the bank needs to address preferences in its workout agreements with appropriate dates.

A loan modification agreement may also involve additional filings pursuant to the Uniform Commercial Code, or mortgage modifications.

A commercial loan workout attorney with over ten years experence – Thomas Howard answers your questions in the video below.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime. R. Martindale

Need A Workout Lawyer

Thomas Howard has completed dozens of loan workouts and helped financial institutions recover the collateral base.  Call (309) 699-4691.


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