Hello, and first off thank you for your time.
About 6 months ago, I borrowed $20,000 from a personal business acquaintance in the form of a personal loan. I signed a promissory note to him at that time. My terms were 15% yearly interest, interest only payments every month of $250 until loan was repaid. $2,000 origination loan charge to be paid at when rest of amount was paid off, and a due date of 6 months. And, the time is nearing to pay it back, and I do not have the money. At the signing of the loan, everyone thought paying back would be no problem, but the situation changed, and now I'm not able to. The reason why it changed and what changed and all that isn't that important.
They have offered me a new loan if I needed time to pay the balance off, this time though, I have to pay the origination fee from the current loan ($2,000) plus an origination fee for a new loan whatever the new amount will be (at least $20,000) is (5 points). And, the terms will be the same as the existing loan. That would pay off old loan, but put a new one in it's place for basically same amount. Kind of confusing with my wording, but essentially it's the same loan, they just get to charge me an origination fee again, and this time it's up front.
Anyways, I don't have the money myself to pay off or extend the current loan. There is a slight chance I can borrow the money to extend the loan from a family member, and even a slighter chance of being able to borrow the money to pay it off (real slight, like a glimmer of hope) The loan isn't attached to anything, and I don't own a property anyways. I'm totally happy with paying more money back in the long run, but I don't have any money to pay for a new loan upfront, plus, I feel like if I do that, I'll just be digging myself a deeper hole, because "what if in another 6 months, I don't have the money?"are my thoughts.
Basically what I want to know is, what should I do now? How should I go about repaying the loan? I want to try to negotiate paying back more in the long run, with no money up front, basically an extension with more money thrown on the back end. If I can't negotiate anything or borrow money, what can happen? What legal power do they have? Will I have to file bankruptcy, or will I be blacklisted or something? Basically, I won't to know what power they have and what can be done to me if I can't repay the loan on their current terms, since that seems like the most likely scenario. I'm fully intent on paying this loan back, I'm not trying to find a way out of it. I have made all payments so far, I just do not have the means to pay back the entire loan at this time, and may so in the future.
Thank you for your time and advice.