What To Expect From Your Insolvency Practitioner

What To Expect From Your Insolvency Practitioner

Companies in distress can use the guidance and advice of an insolvency practitioner who is licensed. This intervention can be the difference between business success and failure. As a company you can easily improve cash flow situations and regain momentum when you get professional help from an IP. However, to get the best results you should strive to work only with a professional who is not just an effective communicator, but also has technical expertise and knowledge to help your business recover. What then should you expect from a good insolvency practitioner?

1. Patience in getting to the root of the problem

Even though businesses do encounter very similar problems, they can still be very different and unique. Your IP should have the patience to get to the underlying issue in your business front to come up with solutions that are vital in improving your operations. The expert should also have the empathy to help distressed directors handle negotiations and deal with creditors.

2. Effort to find a better solution

Before rushing into liquidation, a good IP should foremost consider ways that could rescue your business. Sometimes closure is not always the only option and when you are working with a professional it will be easier to identify other avenues that can rescue and salvage your business. They should actually have the right connections that can help you bounce back and return to profitability. Expect effort in trying to save the business instead of jumping right into liquidation.

3. Effective communication skills

It is one thing to identify the best course of action for your business and quite another to help you understand the situation and what needs to be done. When working with a professional insolvency expert then you should get communication that is easy for you to grasp as a director or company official. It is important for an expert to be able to convey reasons for taking the steps they take and all parties involves should be able to understand and be in agreement with what is about to happen so that surprises are kept at bay.

4. Efficiency, integrity and honesty

Insolvency is a very sensitive area and the duties trusted with a practitioner are just as sensitive. You therefore deserve nothing but an honest and open practitioner in every deal they undertake on behalf of the company. Complete integrity and transparency is what you should get from your IP for the process to be less tedious for you and other directors. The expert should also be faster in spotting strategies that are tangible and suitable for the company’s survival. A practitioner who is fast enough in actions will manage to keep your business alive because money drain can be stopped.

5. Excellent project management and leadership skills

These are skills that make it possible for the IP to keep everyone, including the creditors and the directors updated. This can be very challenging, but with a clear understanding of the process and proper management and leadership skills, you should get the best from your insolvency expert

How to Pay Off Credit Card Debt Quickly

How to Pay Off Credit Card Debt Quickly

Christmas and holiday spending can be brutal on any household budget, considering most families significantly overspend during the holiday season. It is estimated that the average American household has more than $8000 in credit card debt. After all the fun and festivities are over, you should take control of your household budget and expenses. Unfortunately, one of the biggest yet most controllable expenses for most individuals or households is their revolving debt. The payments may not only handcuff your spending ability, but they can limit your financial options to purchase a car or house. In order to escape from the trap of credit card debt, you will need to determine the best way to pay down and eliminate your debt. The following is a list of suggestions on how to pay down your debt and improve your financial situation.

• Collect Your Information – Gather your last pay stub and all your latest credit card statements. Write down the name of the creditor, balance, interest rate, due date, and the minimum payment for each card. Then add up all the minimum payments for each account. Based on your disposable income after you pay your mortgage, utilities, and other necessities; do you have enough money left over each month to make the minimum credit card payments? Also, write down how much interest you are paying monthly and annually. This is the amount of money that is being wasted.

• Make a Plan – Once you have a basic budget that includes your income and debts, you can then decide if you want to consolidate your debt, start to reduce your debt by paying off the cards with the highest interest rates first, or start by paying off the cards with the lowest balances first. Choose a plan you can stick to, no one knows your financial situation better than you do.

• Consolidate Your Debt – Turn your revolving debt into a term loan. If you close your credit cards after consolidating them, you will no longer have the ability to add to your debt. Also, part of your payments will be reducing the principal balance of your debt, unlike minimum credit card payments that are usually just paying the interest on the outstanding balance. Therefore, you will be paying down your debt and the consolidation loan should be paid off within a certain number of years. If you are financially capable, it would benefit you to make more than the minimum payment, thereby reducing the principal balance on the debt faster. If you decide to consolidate your credit card debt, take the time to thoroughly compare your options and shop for an interest rate that is lower than your credit card interest rates. Also, set up an automatic payment arrangement for your consolidation loan. This will prevent you from falling behind in the payment and potentially facing penalties and/or a higher interest rate.

• Debt Settlement – This is the program that is an alternative to bankruptcy. When you go through your finances, if you find out that your monthly payments exceed your financial ability, you will need to seek alternative options, such as: working with a financial institution to consolidation your credit, discuss your options with a bankruptcy attorney, or talk to the credit card companies directly to reduce the principal balances owed on your debt.

• Stop Charging – Once you make your plan to pay off your debt, you will need to be committed to stop charging on your credit cards and creating new debt until your finances are under control. Your plan will not work unless you reduce your spending.

Taking control of your finances may create short-term hardships and limit your ability to purchase items over the next few years, such as: a new car, new house, or a vacation. Nevertheless, it is imperative that you control your spending, so you can improve your finances and get out of debt. Once your debt is paid off, you will have a significant increase in disposable income. In addition, you should have higher credit scores and a lower debt to income ratio; therefore in the future, you should qualify for preferential rates on auto and home loans.

Getting Stuck in a Debt Trap

Getting Stuck in a Debt Trap

It certainly isn’t hard to get into debt today. Businesses create compelling ads that entice you into buying things you don’t really need. Paying cash is a thing of the past. Items can be easily purchased on credit or debit cards, either in person or on-line. This results in careless spending and improper financial planning that can quickly throw you into the debt trap. Then once you are caught, it is very hard to get back on track again.

Why do so many people get caught in the debt trap? This is mainly because we have developed an entitlement mindset and believing that we deserve to have everything we want. We don’t even need the cash to cover our purchases, all we have to do put it on our credit cards and pay for it later. Sometimes we even ignore the needs of our families and waste money on things we don’t need instead of paying for important things like bills and groceries.

We continually hear these statements: you deserve the best, shop till you drop, just charge it, treat yourself, pay later. What sounds like a good idea ends up becoming a burden when the credit card statements come and there isn’t enough in our bank account to cover the minimum amount.

Have you ever considered how much money you spend on stuff you don’t really need? There is a huge difference between needs and wants. We might really believe that we need something when in fact, we really don’t need it, we just want it. Here is a quick list of some costly wants:

COFFEE – If you buy 2 coffees a day costing $1.60 – in one year you will spend $1,168.00.
EATING OUT – If you eat out at a restaurant once a week and spend $80.00 – in one year you will spend $4,160.
TAKE OUT – If you bring home food once a week and spend $40 – in one year you will spend $2,080.
CLOTHING – If you buy 1 new item of clothing each week and spend $50 – in one year you will spend $2,600.
GROCERIES – If you buy extra snacks, sweets and treats each week when you buy groceries and spend $40 – in one year you will spend $2,080.

If you total all these things, they come to over $12,000! Yikes. This could buy a car, a down payment on a house or even be saved towards the future.

Think about the things that you buy that are totally unnecessary. It may not seem like you are spending much money at the time, but it really adds up. Don’t put yourself in debt over unimportant things. Digging yourself into debt is not fun and it takes a long time to recover. Make sure you are spending your money wisely. Don’t get yourself into a debt trap.

Tips for Debt Collectors

Tips for Debt Collectors

No matter what type of business you own or what the company provides to consumers, debt will always be sitting in the collections pile. Debtors typically do not plan to stop paying you, but many unforeseen circumstances can occur that get in the way of repaying what is due.

Collecting on the debt becomes harder and harder the longer it sits in a pile. When you plan on pursuing the debtor for the balance owed, you must follow specific guidelines and rules.

Hiring a debt collector is always a good idea to ensure that all collection practices abide by the laws of your country, as well as to ensure that all processes utilized protect the company from court actions. You don’t want a debtor to win the case based off of bad practices or technicalities. That of course is assuming that it comes to that point down the road, but the debt is often resolved in a settlement or repayment arrangement.

Key Guidelines for Debt Collectors

Once you decide to pursue a debt owed, you must follow certain rules and guidelines to ensure a legal and safe attempt at collecting the debt from the debtor. To begin with, you must treat debtors with respect and in a fair manner. When contacting them, you must have a valid reason to do so and it is a good idea to avoid constant calling, which can be turned around into harassment.

Use calls for:

Providing information about the account to the debtor
Establishing repayment arrangements
Offering a settlement or special repayment plan
Reviewing an existing payment arrangement status
Etc.

Do not use calls for:

Embarrassment around other parties or people
To scare the debtor with aggressive conversation
To annoy the debtor and wear them out

Things to Avoid

It is very important that you do not create letters or make verbal conversation that can be misleading or impersonated. In other words, you cannot pretend to be someone you are not or a company that you are not with. Don’t pretend that you are part of another major organization in order to scare the consumer. You also cannot tell them you will do something that you won’t or may not do. For instance, don’t tell them that you will transfer the account to a high level authority or that you will seek repossession of their home. In addition, you definitely cannot threaten to do things that you cannot or will not do, such as take all their possessions and have the police arrest them.

Collecting debt is a hard thing to do and companies can easily sway in the wrong direction or say something that they may end up regretting. This is why hiring a deb collector is a good decision because it helps protect your business and also helps to recapture all or part of the given debt

Debt Settlement: Is It Right for You

Debt Settlement: Is It Right for You

The debt settlement is the means of negotiation that comes into play when you or a respective company is liable to pay money so that the creditors accept some portion of money against the full payment. The debt settlement company will force you to pay some amount on a monthly basis that is due until you have enough payment to pay off your creditor.

The theoretical aspect

As soon as you agree to a debt settlement program, many of the settlement firms will advise you to stop making the credit card payments monthly. Taking such a step will enable you to save money. Once you have enough money, the debt settlement firm will negotiate with your credit card company. It will offer them a one-time and a large payment that will settle your debt.

It is believed that many of the debt settlement firms claim that the one-time payment is much less that the original payment that you owe. They even state that will ensure that you no longer get bothered through endless calls from the creditor or the collection agency. But the downside is that people incur much debt, and debt settlement does not look good at all.

The reality

If you agree to the following debt settlement plan, then you would know the real picture. For instance, you have 10,000 dollars in debt and that it takes three years for you to save enough to reach a settlement. This usually amounts to the half of the amount you owe, but your total debt would have doubled.

By the time you save half of your original debt, which is 5000 dollars; the debt will become 20,000 dollars respectively. In this regard, to reach a settlement will mean that you should have half of the new amount which is 10,000 dollars.

Disadvantages

Fees can be substantially high: Several of the debt settlement companies not only charge an upfront fee but a percentage of the total debt as well.

Your credit score can get affected: It happens that the credit score gets dropped because of partial or late payments. This occurs because you do not make payment for some time as part of your debt settlement. On the other side, the financial experts believe that settling of the debt for less against the full credit card payment also hurts the credit card score considerably.

Your credit card company can sue you: The moment you stop paying credit card bill on time, the creditor can file a lawsuit against you.

Not all debt settlement companies are reliable: You need to remember that the industry is not solely run by the federal government. There are plenty of scams where the respective firms can collect money and never settle the debt payment at all.

The tax needs to be paid on the debt: A point for you to remember is that the difference between what you pay and what you owe is considered as the income by the Internal Revenue Service. This means you need to pay the taxes that come under this amount.