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Here's the drill, no, you're going to have to pay something. It breaks down this way.... you can negotiate (through an attorney) to pay a discounted payoff. Depending on the amount 50 cents on the dollar is a good starting place. This saves them litigation costs and a bird in the hand is worth 2 in the bush drill. The other method is 100% of what's owed over time. My advice is don't try to argue that they ruined your integrity or any other BS... you will just waste time and money and it will get you no where except really piss them off, remember, you're negotiating.... you were happy to take the money, man up and figure a way to pay it back. Oh, one other thing, don't take another check to pay this one off... that's the dumb and dumber method. I've personally dealt with this issue, the sooner you put it behind you the better off you will be. Take a HELOC out and pay it off, the interest is lower and tax deductible. Control Your Future, Go Indie RIA!
Good question...it would have to be I think .
Smoke and mirrors, most advisors go deaf, dumb and blind when the bait is dangled in front of them... why are there so many 80 year old guys still working? Cause they're broke, plain and simple. Control Your Future; Go Indie RIA!
APA, we get it and wish we would have. The point is now what and how.
WF... borrowing money to pay back borrowed money is the wrong way to go
Okay. Let's assume you owe then 200k and they settle for half that. Is the other half considered taxable income?
Of course... (geez...)
What else would it be?
They will take you arbitration and win 100 out of 100 times. They can also win attorney fees and interest on top of what you owe.
Remember, WFC has staff attorneys on salary. They will file every possible motion, discovery, de mure, that will run the bill up on your 450/hr. guy. Just settle and get on with your life.
Woodbury is 100% correct, plus you'll have to pay their attorneys fees plus interest on your note.
Anyway to start a class action? If you are in a bad spot with your deal, you may be in the situation like many in my area that have a debt building based on a calculation never agreed to. You can be performing to your contract and note that you signed and still be building a huge negative. WTH is this about?!
FA, the answer to your question is to pay back the money. Period. Find a firm that will pay you to move, use that money to pay it back. This time pay attention to the details and the forgiveness schedule. Or go to a bank and borrow the money. There is no other option.
Agreed. But it doesn’t sound like he has the money to pay it back. Borrowing the money to pay it back is better than not paying the money back and hoping to weasel out a settlement in arbitration. He’ll get smoked in arbitration.
APA, another lecture about why he shouldn’t borrow money isn’t helpful. He is where he is. He didn’t ask for salt to rub in his eyes, he asked what is options are. Whether he borrows the money to pay back or finds it buried in his backyard, it doesn’t matter. He has to pay it back. End of story.
Borrow via a HELOC or Pledged Asset loan, or borrow it from a bank (good luck, there are some lenders specializing in this area but about same interest rate as a CC). Worst idea is making a lateral move for another upfront, you've accomplished nothing.
APA, awful advice. You’d prefer him to use home equity or loans with credit card like interest rates, instead of a forgivable from his next BD? He takes a 5 year deal from his next firm and one of two outcomes are going to happen: 1. He stays the full five years, and all is forgiven or 2. He wants to leave before 5 years and is in the same predicament. Assuming he has a clean compliance history, I fail to see the wisdom in putting your home or personal assets at risk unless you absolutely have to.
Your general antipathy towards forgivable Loans is noted, and I agree, but it’s his best option.
Also, we’ve meandered from the ultimate point, which I think we both agree: pay back the money!
They can structure a payment plan (mentioned in my first post) w an interest rate and pay it all back. No borrowing, no lock-up at another place they will eventually hate as much as WFC. Go Indie RIA, max cash flow, build real equity, pay lower taxes and control who your clients are and what they own. The Captive BD model is broken, $50Bln left this year, prolly $100Bln next.