This article describes the differences between stretched senior and unitranche debt. There are many variations of stretched senior debt, but the differences are mostly that the debt is a type of “self-secured debt”. It does not need to be repaid. It can be paid off after several years.
Some people have found that when they get their first unitranche of senior debt the interest rate is higher than it is on their traditional senior debt because of the risk. Some older Americans may find that their stretched senior debt is lower than their stretched senior debt from other sources because the senior credit card companies do not require as much in interest as they used to.
For those who have their own home, many of them prefer to stay with the regular interest rates that they have and not go back to the credit card companies. Many of them feel that they are better off with the regular interest rates that they already have, and they just cannot afford to make another round of credit card payments. They may still use their credit cards but the amounts may be reduced.
When someone gets their first unitranche of stretched senior and unitranche debt they should look at the terms of the debt contract carefully. In the contract the company will normally state that you cannot file for bankruptcy because you will have to pay back the money. In this contract the company is saying that if you file for bankruptcy they will have to sell your home at auction.
Most people like to try to negotiate with their debt companies in order to lower their debt so that they can pay it off easier and faster. The company may offer to lower the amount owed or interest rates. This is something that you should not accept because the longer you take this step the longer it will take to get out of the debt.
When you become unable to pay off your stretched senior and unitranche debt you should talk to your lender about a loan modification. This is an option that you can use to get some of your debt eliminated and you will get lower monthly payments and you can still be in good standing with your mortgage company.
Another option that you have is debt settlement. This means that you negotiate with your creditor and come up with an agreement where you pay him less than the amount that he is asking for.
Remember, no matter what you do when you have the debt negotiation you have to keep in mind that it is a difficult process and it might take a while before you can pay off all your debt. If you wait too long it could lead to foreclosure.