Point of no return?

The other day I heard a financial services commercial which at first seemed like another irresponsible financial ad. Sort of odd to hear them after what we just went through/are going through/just begun to go through financially. Though I guess there are always predators out there looking to separate a fool and their money. Still, it's annoying to hear.

Anyway, the commercial talked about reaching "your financial point of no return". The point, I guess, where your debt load becomes so unbearable that you give up. They contended, that giving up is exactly what you should do!! "Stop paying your creditors until you talk to us!" Wow, that seems really irresponsible, I thought.

So the other day this potential client comes in and we start talking about his business. He was only a potential client because, as we soon found out, that he could barely afford to pay himself, much less us. However, we determined that this business had reached its financial point of no return. They were paying their bank loan, just barely, every month and the bank was not willing to renegotiate the terms of the loan with them or extend further credit. The bank wasn't even returning the guy's call. He already had maybe $500k in loans with the bank, maybe it was more.....I can't remember exactly.

This guy needed more money to finish a development project he already started, otherwise he would eventually, most likely, default on his loan from his bank. So we said that paying the bank on a monthly basis, when they are only prolonging his demise was not the right thing to do. We told him to not make his payment and that would get the bank's attention. Suddenly they are at risk of another $500k moving into their default portfolio which would be very bad for them during this financial crisis. Plus it would hopefully make them realize that allowing him to finish and sell the development was probably the best idea for everyone and, unless they wanted unfinished real estate to try and sell, that it was really their only option as well.

I don't know how it turned out with this guy and the bank, and I might not ever find out, but sometimes, just sometimes, what seems like the exact wrong thing to do.........is really the right thing. In this case, it was the only reasonable option.......for someone at the financial point of no return.