Renegotiating Debt May Have Unintended Consequences
Written by Dennis Fitzpatrick, JD [Commercial Investment Real Estate Magazine]
Article submitted by Saurage Rotenberg Commercial Real Estate
As markets conditions continue to squeeze both landlords and their tenants, renegotiating loan terms can be an effective strategy for property owners to reduce overhead. But beware — the financial implications aren’t as simple as they sound. Many property owners fail to realize that renegotiated or discharged debt doesn’t just cease to exist. Further, other owners are not aware that they’ll probably need to realize the savings as income. And yes, if you cancel or decrease your debt, you will be liable for taxes on it.
There are three ways property can be surrendered in discharge of debt. Foreclosure is a legally defined procedure for a secured lender to acquire secured property. This is an expensive, time-consuming process for a lender. A deed in lieu is a voluntary transfer of property to the lender in lieu of foreclosure proceedings.
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Saurage Rotenberg Commercial Real Estate was established with the goal of providing outstanding professional commercial real estate brokerage services. Comprised of highly-skilled, certified professionals, and experienced marketing experts with diverse backgrounds Saurage Rotenberg Commercial Real Estate is comprehensively experienced in every aspect of the commercial real estate industry—an advantage that allows us to provide a full range of services based on our clients individual needs and objectives.
Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Growth Coalition; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).