If you can’t determine likely duration of default, you should request a relatively short period of lower payments until you can better evaluated situation. Be prepared to negotiate length of period, amount of reduced payments and credit enhancements.

If default looks hopelessly incurable, you may proceed in number of ways. You can: 1) offer to return equipment to lessor and pay lease balance over an extended time; 2) offer to find a suitable sublease arrangement for equipment; or 3) see whether lessor will allow you to keep equipment and make reduced payments on a month to month basis until you or lessor can re-market equipment. If all else fails in working out an acceptable solution with lessor, it may be time for you to get a skilled attorney involved.

If you are able to reach a mutually acceptable solution, some lessors might require a formal forbearance agreement covering new understanding. These agreements can take form of an informal letter of understanding or an extensive legal agreement. The agreement form may depend on size of transaction and preference of lessor. Most lessors ultimately expect to be compensated for forbearing via a one-time forbearance charge, penalty rental payments or other means. Also, expect to reimburse lessor for any legal expenses incurred to document a forbearance arrangement.

Most lessors don’t want to take legal action or cause customers hardships that will interfere with recovering their lease investment. This preference is weighted against prospect of realizing a larger eventual loss by allowing customer to retain equipment. It is usually more advantageous for lessors to work with customers if situation seems salvageable. The less desirable alternative is to go through an expensive and lengthy legal process to foreclose on lease and attempt to repossess equipment. Many large lessors have individuals in-house that specialize in managing ‘work out’ transactions. These specialists usually have had experience with many lessee payment defaults. Their mandate is to get quickest recapture of lease investment possible, subject to protecting investment. If it becomes clear at any time that lessor plans to take legal action against your firm rather than try to work with you to realize a mutually acceptable solution, get a skilled attorney involved. The attorney can provide you with your legal alternatives and may be able to assist you in negotiating with lessor.

When your company’s fortunes take a turn for worst and you have to modify payment terms with your leasing company and other creditors, don’t panic. This is time to redouble your efforts and to draw up plans to remedy situation. Early aggressive actions by you to develop solutions will pay great dividends. Make every effort to create and propose plans mutually acceptable to all parties. However, always be prepared seek legal help should grim reapers or Dementors show up at your door.

What do you want to have? This is where your dreams and your wish list come in.

What will it take to get you what you want? Can you do that with your current company or do you need to consider going to another company for more money? Do you need to consider a second job? Or do you need to consider more education like I discussed earlier?

What will it cost to buy house you really want? If you currently rent, a house is an investment. If you already own a home, you need to ask yourself if a different home is a need or want. If your family is growing and space is an issue, then it is a need. If you want your children to grow up in a better neighborhood or attend a better school district, this is also a need.

If you are thinking of selling your home just because you want a better home, you have to ask yourself if it really is worth it?

Will you make enough money from this home so your mortgage payments won’t be too much higher than they are now? Can you accomplish same thing by taking out a home equity loan or line of credit and fix up your current home?

Are you willing to take longer to reach your other financial goals just to have home that you want?

How much will it cost to give your children college education you want them to have? Will you handle whole cost or will you expect them to get a part time job to pay for their books and to earn their own pocket money? They need to know what you expect of them and they need to know what they can expect from you.

Have your parents provided well enough for themselves during retirement? Will you have to help them out financially should one or both of them become ill? Will they need to live with you if that happens? Do you have space or money to make necessary adjustments if that does happen?

How much will it cost to retire with lifestyle that you want?

How much time do you have to accomplish theses things? Whether you have 20, 30 or 40 years to accomplish these things will make differences in answers to questions.

These are only some of things you need to think about. It depends on what you have now and where you want your life to go. That is different for everyone. Only you can decide. Only you can choose what you want next year to be for you and what you are and are not willing to do to accomplish those things. Deciding to make a change won’t work if you don’t take actions necessary to make those changes.

It can be done though. People change their lives for better all of time. All it takes is desire to come up with a plan to make changes and determination to stick to plan and see it through. Knowing full well that there will be bumps in road and things will come up unexpectedly but adapting and changing with unexpected and getting back on road again.

You can do it if you want to do it badly enough. Start small if you have to. An extra five or ten dollars a month saved in a retirement account or put toward debt over time does make a difference. Don’t think that because you can’t start off with a bang or with some grand gesture that you should not start at all. Time and compounding interest is on your side and works even when you start small as long as you keep at it.

Now it’s time for you to decide. Are you going to be one of those people who makes resolutions and forgets about them? Or one of those people that keep doing same things and expects different results? The same things will only bring you same results. Or are you going to be one of those people who has decided that next year and every year after will be better than year before and act on it?

Teresa Kaufman is the owner/creator of http://www.yourdollarsandsense-budgets.com Copyright © 2004