Some North Carolina businesses may still be feeling the effects of the recession. A company that owns real estate could find itself facing a business foreclosure due to an inability to recover from the economic hardship felt by consumers and businesses alike. A foreclosure could cause irreparable harm to a business struggling to get back on its feet. Certainly, it may be beneficial to explore alternatives.
One option is to offer the lender a deed in lieu of foreclosure. This is what one out-of-state business did recently. The facility that included a bowling alley and banquet center suddenly shut down in July of last year. The threat of foreclosure prompted the company to try to avoid it.
The Wisconsin facility is on 5.7 acres and includes a 23,331-square-foot structure. St. Nikolas Association Inc. decided to transfer ownership of the property to its lender, Landmark Credit Union, instead of going through a foreclosure. The property was valued at approximately $716,000. The total amount owed on the property was not reported.
Here in North Carolina, a deed in lieu of foreclosure normally satisfies the full amount of the debt. This makes it an attractive option to many companies facing a business foreclosure. Avoiding the foreclosure process can also save a business a significant amount of time and money that would otherwise be expended defending a foreclosure proceeding. A company that is no longer able to pay its mortgage debt may benefit from consulting with someone familiar with foreclosures and the options available to achieve a satisfactory solution. It may be possible to come to an agreement with the lender that does not include a judgment of foreclosure and help the company return to solid financial footing.
Source: jsonline.com, “Franklin banquet center, bowling alley transferred to lender“, Tom Daykin, Oct. 2, 2014