The credit and financial crisis has resulted in a substantial amount of loans secured by real property defaulting. The troubled loans have to be restructured or worked out. Many of the mortgagors (owners) are unable or unwilling to provide additional equity to the properties secured by the troubled loans. The owners desire to maintain ownership of the troubled properties while avoiding substantial payments of tax to the Internal Revenue Service (IRS) in connection with a restructuring or workout that does not generate any significant cash.
This article begins a discussion which focuses on the key issues that the owner of a troubled property faces when engaged in a restructuring or workout of the troubled loan and is not ready or able to pay the tax.
Refinancing of Troubled Loan
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