Speed Bump on Debt Payoff

dead endOf course, it is inevitable.  Anytime you want to make progress on something, whether schooling, a home improvement project, or debt payoff, you will run across a speed bump that slows you down or may even knock you off course.  I am not sure how this will affect me, but I do know that it has the potential to be a major issue.  However, it is still my goal to have all that consumer debt I outlined paid off totally by February 2016 at the very latest.

The Problem

In 2008, just before Lehman Brothers went bankrupt and the economy imploded, a friend and I purchased some land for the purpose of building a small building to hold his business with some extra room for a tenant or two.  It turns out that he had to occupy 65% of the building for the loans from the Small Business Administration.  So that is what happened.

Unfortunately with the economy the way it has been, the other portion of the building is sitting empty still and his business has struggled somewhat this past year with decreased sales.  Add to that his own poor personal decisions and the time has come for me to take over the building completely.  I will be decreasing his rent for 2 years in exchange for a portion of his business as well.

But, it will put a damper on the payback of my debt.  It would be nice to say that I should walk away, but I am personally (as is he) liable for the loans so that isn’t the smartest first plan of attack.  Also considering that I do have some capital already invested and it would be quite a major hit to take.

Monthly Budget

It will make the monthly budget tight again to take over full responsibility of the building expenses.  But I do think that the business has the potential to turn around.  It already made some progress in January and February is looking better as well.  In the meantime, I will have to be watching every penny and probably slow down the debt payoff schedule for the next few months until I get a better sense of the cash that will be needed.

Life has the potential to constantly knock you down, but you can either stay down or get up and forge ahead.  I will be forging ahead but in a slightly different direction.  Still, my total debt balance will continue to decline.  Plus, I get to interact with some new bankers and learn more about commercial real estate.

There is always a silver lining to those speed bumps.