As a search engine optimization specialist, I often run acrosssearch engines of different sorts than most people are aware of.This week I stumbled across a free site that is used by journal-ists to do background checks and fact checking on sources of news stories. I am also an advocate for personal and financial privacy and find privacy invasion particularly offensive, so this searchengine offends me.
The http://www.pretrieve.com/ Free Public Record Search Engine - Person Search is an example of the databasification of all public records. It's instructive to take a look at the results of a search for yourself in this free people search engine that is apparently used often by journalists. The linked page above takes you to the site home page which is a form allowing you to search for a person, business, address or phone number and the results pages can be frightening.
The results are listed as questions on the Pretrieve.com site in a row of tabs labeled "Property Info, Criminal, Court, Professional, Local Info, Miscellaneous" and the "Criminal" tab (Criminal) inserts your name or that of the person you are searching for in each possible source of criminal information under a link labeled "Registered Sex Offender Search" then a question with the searched name and state inserted: "Is anyone named (your name here) a registered sex offender in "your state here"? If you searched for your own name, it appears in that frightening position and startles you quite handily.
The arrangement of tabs with criminal info first must be done for the dramatic effect it has on what would otherwise be a rather mundane search of bland information. But when I went ahead and pressed that frightening link, I got a gratifying "no information could be found" result page. Whew! Then again on the link leading to the "Federal Inmate Search" I got a gratifying "Sorry. No Inmate Named (Your name here) Race: unspecified Sex: unspecified found." on the new window launched on the Federal "Bureau of Prisons" site search.
Since I write frequently online, there are hundreds of sources of information on me available in one of the results tabs labled "professional", I was happy to see that my occupation was correctly listed as "Search Engine Optimization Specialist" with sources coming mainly from resource boxes of my articles appearing across the web.
The interface of the Pretrieve.com result page also links you to organizations that have published information about you and fills in the name information, going directly to a search on the name entered at the new site. The interface of Pretrieve.com links you to their sources by launching new windows at different web sites and prepopulating the search forms with the name and state info.
The "professional" affiliations are tracked by a site called "Eliyon.com Business People Search" where links to web mentions are tied to the byline of my articles. Seems their forte is finding business mentions to connect with names. OK. But I was surprised to see that one company that I work with was incorrectly listed as being in Northern California, when they are in fact in Southern California. Oh, and they incorrectly named, but correctly linked to the web site of that company.
This type of error is probably common in online databases and is one of the biggest problems with this type of data aggregation. It is not kept current or accurate by all sources and there are others with the same name, etc. There is a prominent link on theEliyon.com site labeled "Log in to Update your Profile" or theDidn't find yourself? Add your profile!" link is ridiculous. Why give them info they don't have so they give it to everyone else?
The Property Info tab is truly offensive as it gives you a link to the county tax assessors office record of any property owned by someone you've searched for. Plus their home address, square footage of their house, how much it is worth and amount of taxes owed on it. Oh, and phone number, street address, zip code.
The multiple other options take you to financial records such asbankruptcy filings, political contributions, defaulted loans and dozens of other possible financial records you don't want theworld to see. Why is this acceptable - and the bigger question - why is this legal?
A very interesting note comes from the Pretrieve.com privacy page where they make this curious statement: "It may seem contrary for a company dedicated to making public information more easily accessible to be an ardent supporter of information privacy, but the fact is we take information privacy rights extremely seriously. We believe public information should be open and made available to everyone as adamantly as we believe private information should remain private."
But doesn't making all sources of public information easily available, make possible private information easily available along with it? Actually, this only applies to informaiton directly available on the pretrieve site, which is nothing other than your computer and connection info as they don't require registration to use their service. They do place cookies on your hard drive so the site will not work if you turn off that option in your browser. The information business seems to be full of contradictions.
http://www.articlebin.com/view-You_Cannot_Hide_From_Public_Record_Search_Engines-805.html
Tuesday, September 4, 2007
Corporate Insolvency Laws in India
With the globalisation of the Indian economy, the sphere of Corporate Insolvency Laws has widened collosally.
With the globalisation of economy, the issues relating to corporate insolvency have assumed greater significance and a need has been felt for long for bringing about reforms in this branch of law. Moreover, with the Indian economy having been opened up for investment by foreign creditors and, internationally, the Indian corporate also making investments in companies outside, the realm of cross-border insolvency law has multiplied colossally.
In the year 1999, the Government of India set up a High Level Committee headed by Justice V.B. Balakrishna Eradi,[2] a superannuated Judge of Supreme Court of India for remodeling the existing laws relating to insolvency and winding up of companies and bringing them in time with the international practices in this field.
Recommendations of the Committee
The Committee recommended that:
* The jurisdiction, power and authority relating to winding up of companies should be vested in a National Company Law Tribunal which should be vested with the functions and power with regard to rehabilitation and revival of sick industrial companies, a mandate presently entrusted with BIFR under SICA.
* The 1956 Act should be suitably amended to take the power away from High Court and the transfer of the pending winding up proceedings to the Tribunal.
* The adoption of the international trend in law relating to corporate bankruptcy, namely, sell the assets first as quickly as possible, and relegate to a later stage the adjudication of claims and distribution of proceeds.
* An in depth assessment of the office of Official Liquidators, in view of inadequate and incompetent manpower and absence of latest office equipments and technologies.
* A liquidation Committee consisting of creditors of the company on the lines of Section 141 of the Insolvency Act, 1986 of UK[3] be set up to assist the Liquidator.
* The repeal of SICA and recommended the ameliorative, revival and reconstructionist procedures obtaining under it to be reintegrated in a suitably amended form in the structure of the 1956 Act except that there is no stand still provision like Section 22 of SICA.
* Part VII of the Companies Act, 1956 should incorporate a new substantive provision to adopt the UNCITRAL Model Law[4] as approved by the United Nations and the Model Law itself may be incorporated as a Schedule to the Companies Act, 1956, which shall apply to all cases of Cross-Border insolvency.
* Adopt the necessary principles enunciated under the heading "Legal Framework", "Orderly and Effective Insolvency Procedures – Key issues", [5] to bring the provisions of the Companies Act, 1956 in line with international practices.
The Committee completed its work and submitted its report to the Central Government in the year 2000.In August 2001, the Companies (Amendment) Bill, 2001 and the Sick Industrial Companies (Special Provisions) Repeal Bill, 2001 were introduced in the Parliament of India.
The Bills, if passed in their present form will bring the curtains down on the Sick Industrial Companies (Special Provisions) Act, 1985 and will restructure the Companies Act, 1956 in a big way leading to the new regime of tackling corporate rescue and insolvency procedures in India with a view to creating confidence in the minds of investors, creditors, labour and shareholders.
Scheme of Insolvency Laws
The stream of insolvency laws can be segregated chiefly under two heads: Personal Insolvency, which deals with individuals and partnership firms governed by Provisional Insolvency Act, 1920 and Presidency Towns Insolvency Act, 1908 and Corporate Insolvency, whose consequence is winding up of the company under the Companies Act, 1956.
In the process of liberalization, deregulation and adopting market economy, India is experiencing a massive growth of retail loans to individuals, housing loans and credit card users. On account of phenomenal rise in retail lending it will be necessary in the near future to give a re-look at the personal insolvency laws to ensure that any insolvency proceedings against individuals are also expeditiously decided.
However, the basic tenets of corporate insolvency can be classified as: restoring the debtor company to profitable trading where it is practicable; to maximize the return to creditors as a whole where the company itself cannot be saved; to establish a fair and equitable system for the ranking of claims and the distribution of assets among creditors, involving a redistribution of rights; and to provide a mechanism by which the causes of failure can be identified and those guilty of mismanagement brought to book; placement of the assets of the company under external control; substitution of collective action for individual pursuits; avoidance of certain transactions and fraudulent conveyances, dissolution and winding up etc.
In context of corporate laws, the word “insolvency†has neither been used nor defined. However, Section 433 (e) covers a company, which is “unable to pay its debtsâ€, and thus constitutes a ground for winding up of the company. Inability to pay its debts would be a case where, a company's entire capital is lost in heavy losses and no accounts are prepared and filed and no business is done for one year. In such circumstances, the Registrar of Companies makes out a case of inability to pay debts. These debts however, would only include debts, incurred after the legal incorporation of the Company. Inability to pay debts has even been amplified in Section 434 wherein, a creditor with a due of Rs. 500 [6] or more serves a demand by registered post and the company neglects to pay, secure or compound the same in 3 weeks, in cases where the execution of a decree returned unsatisfied and also where the Court is otherwise satisfied that the company is unable to pay its debts.
Sick Industrial Companies
A sick industrial company means an industrial company (being a company registered for not less than five years and employing fifty or above workmen), which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.[7] Net worth has been defined as the sum total of the paid up capital and free reserves.[8]
Sick Industrial Companies Act requires that when an industrial company has become a sick industrial company, the Board of Directors of the said company shall, within sixty days from the date of finalisation of the duly audited accounts of the company for the financial year as at the end of which a company has become a sick industrial company, make a reference to the Board for Industrial and Financial Reconstruction for determination of the measures which shall be adopted with respect to the company. However, if the Board of Directors has sufficient reasons even before finalisation of accounts to form an opinion that the company has become a sick industrial company, it shall, within sixty days after it has formed such an opinion, make a reference to the BIFR.[9]
Moreover, SICA is basically and predominantly remedial and ameliorative in so far as it empowers the quasi judicial body, Board for Industrial and Financial Reconstruction to make appropriate measures for revival and rehabilitation of potentially viable sick industrial companies and for liquidation of non-viable companies. But, where the BIFR comes to the conclusion that it is not possible to revive the company and that it is just and equitable that the company should be wound up, it shall record and forward its opinion to the concerned High Court, on the basis of which the Court, may order winding up of the company and may proceed and cause to proceed with the winding up of the sick industrial company in accordance with the provisions of the Companies Act, 1956.[10]
If a corporate debtor is in difficulty it is likely that he would approach the senior lenders for some rehabilitation, waiver of compound or penal interest, funding of the interest dues on a zero coupon rate or at concessional terms. It would prepare a scheme of arrangement or rehabilitation plan with the assistance of experts or an advisor, which it would submit, to the senior lenders.
RBI has police guidelines for revival of sick industrial companies and the role to be played by lead institutions or Operating Agencies appointed by the SICA for reviving industries declared to be sick under SICA. When a lender appoints an outside expert, the Court of the Board for Industrial & Financial Reconstruction (BIFR) would normally have to intervene to render help to such expert or advisor to collect information on an unrestricted basis. Depending upon the extent of the industrial sickness and the accumulated arrears or losses, it is likely that the records of the company would be in disarray. In such circumstances reconstruction of accounts on the basis of actual transactions is laborious and difficult to achieve. Large accounting firms render costly services and lenders are wary of appointing high cost expensive services in a rehabilitation scheme. Usually the lenders, if they are public financial institutions rely upon their own in-house expertise and staffing to ferret information.
Under the provisions of Companies Act, 1956,[11] several measures have been prescribed for revival of a company. Even in the case of non-scheduled industries, not governed by Schedule I of the Industries (Development and Regulation) Act, 1951 and consequently, under the SICA; the provisions of Section 391 & 394 of the Companies Act for proposing a scheme of rehabilitation and reconstruction is normally recoursed.
Institutional Machinery
High Court is the Court of proper jurisdiction for handling winding up proceedings and power sought to be transferred to the NCLT with the onset of reforms by way of a proposed Bill. The official liquidator is the liquidator in compulsory winding up. Where a winding up order has been made or where a Provisional Liquidator has been appointed, the Liquidator shall take into his custody or under his control all the property, effects and actionable claims to which the company is or appears to be entitled. All the property and effects of the company shall be deemed to be in the custody of the Court as from the date of the order for the winding up of the company.[12] The Creditor’s Committee on inspection may be appointed .In relation to corporate insolvency, the official liquidator as an officer of the Court or the Court receiver as an officer of the Court are dealing with insolvency related procedures.
Pursuit of Individual Claims
In the sphere of insolvency laws in India, where all the suits are stayed on making of the winding up order, parties may pursue individual claims in certain circumstances.
* Winding up procedure implies all personal rights be converted into right to prove debt in winding up.
* Under section 446, stay on all suits and the winding up Court to decide all suits by or against the company.
* A secured creditor may enforce security interest without a suit and therefore, real rights of secured creditors are protected.
* Criminal proceedings or proceedings against directors or officers are not stayed.
* Income tax proceedings will continue against the liquidator.
The Stacking Order of Priorities
The debts due as workmen’s dues and the claims of the secured creditors sacrificed to workmen have an overriding preferential claim or priority to all debts.[13] The debts payable shall be paid in full unless the assets are insufficient to meet them in which case they shall abate in equal proportions.
In the dying stages of winding up proceedings, there is stacking of priorities running from the secured creditors from out of their assets securing their claims, subject to the pari passu claims of the workmen, further, the costs and expenses of winding up under Section 530 (6), then, the preferential creditors under Section 530 (1), the floating charge holders and the unsecured creditors.
There are other statutory preferential payments for taxes, revenues and cesses, wages or salary for past due prior to winding up or for period not exceeding 4 months when there is a continuing employment for the beneficial winding up and for provident fund, pension and other claims.[14]
Rules of insolvency for valuation of annuities and contingent liabilities as are prescribed by the Provincial Insolvency Act and the Presidency Town Insolvency Act continue to apply.
Also, any transfer of property, delivery of goods, payment, execution or other act relating to the property made, taken or done by or against the company within 6 months prior to commencement of winding up be deemed a fraudulent preference.[15]
Compromises & Arrangements
Apart from the lengthy and time consuming winding up procedure, all the companies liable to be wound up under the Companies Act may resort to the alternative of compromise or arrangement. The Court may make orders to enforce these remedies[16] and where a meeting of creditors or class of creditors or members or any class of members is called upon, certain disclosures shall be made. The orders passed by the Courts include transfer of property to another company and to facilitate amalgamation, merger and demergers. Even reduction of capital to the extent that the capital is lost, or capital is in surplus is permitted.
An Analysis
The institution of BIFR has hardly satisfied the call for revival and rehabilitation of sick industrial undertakings and SICA has proved to be a complete failure. The lenders i.e. the banks and financial institutions, find SICA to be the biggest obstacle on their road map to recovery of dues. The existing legal framework of corporate insolvency faces several follies, which may be rectified once the proposed amendments are notified in the Official Gazette.
Procedural delays
There are inherent defects both, procedural and legal in proceedings before BIFR. The BIFR takes nearly one year to determine whether a company is sick. Thereafter, it takes around one year to formulate revival strategy. Consideration of the same also takes substantial time since banks and financial institutions have their own hierarchy in decision making, leading to avoidable delays. The decisions by the banks are also neither transparent, nor subject to judicial review. By the time decisions are taken and communicated, the plan, which had been conceived, has lost its viability resulting in failure of revival schemes even after sanction.
Lack of timely commencement of proceedings
Under the existing law, a company can approach the BIFR for adopting steps for its revival, on erosion of its entire net worth. The erosion of entire net worth is too late a stage to attempt restructuring as by the time the net worth is eroded the company is too sick to be revived and has lost its resilience to restructure and revive itself.
Poor enforcement mechanism
The mechanism for its implementation is so poor that violations take place fearlessly leaving no fear for law. The misuse of the said forum in making an entry by manipulating must be curbed by strict penal consequences for such misuse, which should be demonstrably used to ensure that no entity attempts to misuse these provisions. However, this aspect and solution to this problem has to be found out in the proposed legislation.
Misuse of protection against recovery proceedings
Under SICA, an automatic stay operates against all kind of recovery and distress proceedings against all creditors once the reference filed by the company is registered. This is the principal drawback of the existing legislation as this has led to BIFR becoming a haven for defaulting companies. Erring debtors have misused SICA to seek protection and moratorium from recovery proceedings. The companies are able to enter easily into the reference, sometimes by manipulating their accounts to reflect net worth erosion and are then able to attract immunity against the recovery action by the creditors and this benefit is then attempted to be perpetuated. Registration of reference is dependent upon the erosion of net worth and this can be achieved by accounting manipulations. The provisions for suspension of legal proceedings are misused and perpetuated.
This problem arises due to the fact that unscrupulous promoters enter into the process of rehabilitation by manipulating sickness; take undue benefits arising out of delay in decision making of BIFR. If the reference is rejected, a fresh reference is filed with respect to accounts for the next year and the cycle goes on endlessly. There is no fear of reprisal or punitive action against the companies indulging in this malpractice.
Lack of extra territorial jurisdiction
Indian insolvency laws do not have any extra-territorial jurisdiction, nor do they recognize the jurisdiction of foreign courts in respect of branches of foreign banks operating in India. Therefore, if a foreign company is taken into liquidation outside India, its Indian business will be treated as a separate matter and will not be automatically affected unless an application is filed before an insolvency Court for winding up of its branches in India.
The recommendations of the Eradi Committee have been translated into the Companies (Amendment) Bill, 2001 and the Sick Industrial Companies (Special Provisions) Repeal Bill, 2001 to mend these defects in the existing laws and the end result being tribunalization of justice. The Companies (Amendment) Bill, 2001 proposes amendment of Article 323B of the Constitution of India and provisions of Part VII of the Companies Act, 1956 for setting up of a National Company Law Tribunal (NCLT) and its Appellate Tribunal. The Bill proposes repeal of SICA and abolition of Company Law Board.
Though tribunalisation of justice is now a recognised trend, the India’s experiences with Tribunals have nothing to boast about. They have largely failed to serve the purpose with which they are set up. NCLT would be burdened with workload of enormous magnitude and in the process would be likely to lose focus on revival and rehabilitation of sick entities. Lastly, the misuse of the said forum in making an entry by manipulating/feigning sickness must be curbed by strict penal consequences for such misuse, which should be demonstrably used to ensure that no entity attempts to misuse these provisions. However, this aspect and solution to this problem has to be found out in the proposed legislation.
At present the Government is considering the adoption of UNCITRAL Model Law on Cross-Border Insolvency to meet the demands of globalisation of economy and to deal with international insolvency. This will radically change the orientation of Indian law and make it suitable for dealing with the challenges arising from globalisation and increasing integration of Indian economy with the world economy.
“The increasing incidence of cross-border insolvencies reflects the continuing global expansion of trade and investment. However, national insolvency laws have by and large not kept pace with the trend, and they are often ill equipped to deal with cases of a cross-border nature. This frequently results in inadequate and inharmonious legal approaches, which hamper the rescue of financially troubled businesses, are not conducive to fair and efficient administration of cross-border insolvencies, impede the protection of the assets of the insolvent debtor against dissipation, and hinder maximisation of the value of those assets.â€[17]
While drafting the substantive and procedural rules of bankruptcy, international standards for both national and cross-border insolvency should be taken into consideration which, based on Indian situation, should be suitably incorporated.
http://www.articlebin.com/view-Corporate_Insolvency_Laws_in_India-1767.html
With the globalisation of economy, the issues relating to corporate insolvency have assumed greater significance and a need has been felt for long for bringing about reforms in this branch of law. Moreover, with the Indian economy having been opened up for investment by foreign creditors and, internationally, the Indian corporate also making investments in companies outside, the realm of cross-border insolvency law has multiplied colossally.
In the year 1999, the Government of India set up a High Level Committee headed by Justice V.B. Balakrishna Eradi,[2] a superannuated Judge of Supreme Court of India for remodeling the existing laws relating to insolvency and winding up of companies and bringing them in time with the international practices in this field.
Recommendations of the Committee
The Committee recommended that:
* The jurisdiction, power and authority relating to winding up of companies should be vested in a National Company Law Tribunal which should be vested with the functions and power with regard to rehabilitation and revival of sick industrial companies, a mandate presently entrusted with BIFR under SICA.
* The 1956 Act should be suitably amended to take the power away from High Court and the transfer of the pending winding up proceedings to the Tribunal.
* The adoption of the international trend in law relating to corporate bankruptcy, namely, sell the assets first as quickly as possible, and relegate to a later stage the adjudication of claims and distribution of proceeds.
* An in depth assessment of the office of Official Liquidators, in view of inadequate and incompetent manpower and absence of latest office equipments and technologies.
* A liquidation Committee consisting of creditors of the company on the lines of Section 141 of the Insolvency Act, 1986 of UK[3] be set up to assist the Liquidator.
* The repeal of SICA and recommended the ameliorative, revival and reconstructionist procedures obtaining under it to be reintegrated in a suitably amended form in the structure of the 1956 Act except that there is no stand still provision like Section 22 of SICA.
* Part VII of the Companies Act, 1956 should incorporate a new substantive provision to adopt the UNCITRAL Model Law[4] as approved by the United Nations and the Model Law itself may be incorporated as a Schedule to the Companies Act, 1956, which shall apply to all cases of Cross-Border insolvency.
* Adopt the necessary principles enunciated under the heading "Legal Framework", "Orderly and Effective Insolvency Procedures – Key issues", [5] to bring the provisions of the Companies Act, 1956 in line with international practices.
The Committee completed its work and submitted its report to the Central Government in the year 2000.In August 2001, the Companies (Amendment) Bill, 2001 and the Sick Industrial Companies (Special Provisions) Repeal Bill, 2001 were introduced in the Parliament of India.
The Bills, if passed in their present form will bring the curtains down on the Sick Industrial Companies (Special Provisions) Act, 1985 and will restructure the Companies Act, 1956 in a big way leading to the new regime of tackling corporate rescue and insolvency procedures in India with a view to creating confidence in the minds of investors, creditors, labour and shareholders.
Scheme of Insolvency Laws
The stream of insolvency laws can be segregated chiefly under two heads: Personal Insolvency, which deals with individuals and partnership firms governed by Provisional Insolvency Act, 1920 and Presidency Towns Insolvency Act, 1908 and Corporate Insolvency, whose consequence is winding up of the company under the Companies Act, 1956.
In the process of liberalization, deregulation and adopting market economy, India is experiencing a massive growth of retail loans to individuals, housing loans and credit card users. On account of phenomenal rise in retail lending it will be necessary in the near future to give a re-look at the personal insolvency laws to ensure that any insolvency proceedings against individuals are also expeditiously decided.
However, the basic tenets of corporate insolvency can be classified as: restoring the debtor company to profitable trading where it is practicable; to maximize the return to creditors as a whole where the company itself cannot be saved; to establish a fair and equitable system for the ranking of claims and the distribution of assets among creditors, involving a redistribution of rights; and to provide a mechanism by which the causes of failure can be identified and those guilty of mismanagement brought to book; placement of the assets of the company under external control; substitution of collective action for individual pursuits; avoidance of certain transactions and fraudulent conveyances, dissolution and winding up etc.
In context of corporate laws, the word “insolvency†has neither been used nor defined. However, Section 433 (e) covers a company, which is “unable to pay its debtsâ€, and thus constitutes a ground for winding up of the company. Inability to pay its debts would be a case where, a company's entire capital is lost in heavy losses and no accounts are prepared and filed and no business is done for one year. In such circumstances, the Registrar of Companies makes out a case of inability to pay debts. These debts however, would only include debts, incurred after the legal incorporation of the Company. Inability to pay debts has even been amplified in Section 434 wherein, a creditor with a due of Rs. 500 [6] or more serves a demand by registered post and the company neglects to pay, secure or compound the same in 3 weeks, in cases where the execution of a decree returned unsatisfied and also where the Court is otherwise satisfied that the company is unable to pay its debts.
Sick Industrial Companies
A sick industrial company means an industrial company (being a company registered for not less than five years and employing fifty or above workmen), which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.[7] Net worth has been defined as the sum total of the paid up capital and free reserves.[8]
Sick Industrial Companies Act requires that when an industrial company has become a sick industrial company, the Board of Directors of the said company shall, within sixty days from the date of finalisation of the duly audited accounts of the company for the financial year as at the end of which a company has become a sick industrial company, make a reference to the Board for Industrial and Financial Reconstruction for determination of the measures which shall be adopted with respect to the company. However, if the Board of Directors has sufficient reasons even before finalisation of accounts to form an opinion that the company has become a sick industrial company, it shall, within sixty days after it has formed such an opinion, make a reference to the BIFR.[9]
Moreover, SICA is basically and predominantly remedial and ameliorative in so far as it empowers the quasi judicial body, Board for Industrial and Financial Reconstruction to make appropriate measures for revival and rehabilitation of potentially viable sick industrial companies and for liquidation of non-viable companies. But, where the BIFR comes to the conclusion that it is not possible to revive the company and that it is just and equitable that the company should be wound up, it shall record and forward its opinion to the concerned High Court, on the basis of which the Court, may order winding up of the company and may proceed and cause to proceed with the winding up of the sick industrial company in accordance with the provisions of the Companies Act, 1956.[10]
If a corporate debtor is in difficulty it is likely that he would approach the senior lenders for some rehabilitation, waiver of compound or penal interest, funding of the interest dues on a zero coupon rate or at concessional terms. It would prepare a scheme of arrangement or rehabilitation plan with the assistance of experts or an advisor, which it would submit, to the senior lenders.
RBI has police guidelines for revival of sick industrial companies and the role to be played by lead institutions or Operating Agencies appointed by the SICA for reviving industries declared to be sick under SICA. When a lender appoints an outside expert, the Court of the Board for Industrial & Financial Reconstruction (BIFR) would normally have to intervene to render help to such expert or advisor to collect information on an unrestricted basis. Depending upon the extent of the industrial sickness and the accumulated arrears or losses, it is likely that the records of the company would be in disarray. In such circumstances reconstruction of accounts on the basis of actual transactions is laborious and difficult to achieve. Large accounting firms render costly services and lenders are wary of appointing high cost expensive services in a rehabilitation scheme. Usually the lenders, if they are public financial institutions rely upon their own in-house expertise and staffing to ferret information.
Under the provisions of Companies Act, 1956,[11] several measures have been prescribed for revival of a company. Even in the case of non-scheduled industries, not governed by Schedule I of the Industries (Development and Regulation) Act, 1951 and consequently, under the SICA; the provisions of Section 391 & 394 of the Companies Act for proposing a scheme of rehabilitation and reconstruction is normally recoursed.
Institutional Machinery
High Court is the Court of proper jurisdiction for handling winding up proceedings and power sought to be transferred to the NCLT with the onset of reforms by way of a proposed Bill. The official liquidator is the liquidator in compulsory winding up. Where a winding up order has been made or where a Provisional Liquidator has been appointed, the Liquidator shall take into his custody or under his control all the property, effects and actionable claims to which the company is or appears to be entitled. All the property and effects of the company shall be deemed to be in the custody of the Court as from the date of the order for the winding up of the company.[12] The Creditor’s Committee on inspection may be appointed .In relation to corporate insolvency, the official liquidator as an officer of the Court or the Court receiver as an officer of the Court are dealing with insolvency related procedures.
Pursuit of Individual Claims
In the sphere of insolvency laws in India, where all the suits are stayed on making of the winding up order, parties may pursue individual claims in certain circumstances.
* Winding up procedure implies all personal rights be converted into right to prove debt in winding up.
* Under section 446, stay on all suits and the winding up Court to decide all suits by or against the company.
* A secured creditor may enforce security interest without a suit and therefore, real rights of secured creditors are protected.
* Criminal proceedings or proceedings against directors or officers are not stayed.
* Income tax proceedings will continue against the liquidator.
The Stacking Order of Priorities
The debts due as workmen’s dues and the claims of the secured creditors sacrificed to workmen have an overriding preferential claim or priority to all debts.[13] The debts payable shall be paid in full unless the assets are insufficient to meet them in which case they shall abate in equal proportions.
In the dying stages of winding up proceedings, there is stacking of priorities running from the secured creditors from out of their assets securing their claims, subject to the pari passu claims of the workmen, further, the costs and expenses of winding up under Section 530 (6), then, the preferential creditors under Section 530 (1), the floating charge holders and the unsecured creditors.
There are other statutory preferential payments for taxes, revenues and cesses, wages or salary for past due prior to winding up or for period not exceeding 4 months when there is a continuing employment for the beneficial winding up and for provident fund, pension and other claims.[14]
Rules of insolvency for valuation of annuities and contingent liabilities as are prescribed by the Provincial Insolvency Act and the Presidency Town Insolvency Act continue to apply.
Also, any transfer of property, delivery of goods, payment, execution or other act relating to the property made, taken or done by or against the company within 6 months prior to commencement of winding up be deemed a fraudulent preference.[15]
Compromises & Arrangements
Apart from the lengthy and time consuming winding up procedure, all the companies liable to be wound up under the Companies Act may resort to the alternative of compromise or arrangement. The Court may make orders to enforce these remedies[16] and where a meeting of creditors or class of creditors or members or any class of members is called upon, certain disclosures shall be made. The orders passed by the Courts include transfer of property to another company and to facilitate amalgamation, merger and demergers. Even reduction of capital to the extent that the capital is lost, or capital is in surplus is permitted.
An Analysis
The institution of BIFR has hardly satisfied the call for revival and rehabilitation of sick industrial undertakings and SICA has proved to be a complete failure. The lenders i.e. the banks and financial institutions, find SICA to be the biggest obstacle on their road map to recovery of dues. The existing legal framework of corporate insolvency faces several follies, which may be rectified once the proposed amendments are notified in the Official Gazette.
Procedural delays
There are inherent defects both, procedural and legal in proceedings before BIFR. The BIFR takes nearly one year to determine whether a company is sick. Thereafter, it takes around one year to formulate revival strategy. Consideration of the same also takes substantial time since banks and financial institutions have their own hierarchy in decision making, leading to avoidable delays. The decisions by the banks are also neither transparent, nor subject to judicial review. By the time decisions are taken and communicated, the plan, which had been conceived, has lost its viability resulting in failure of revival schemes even after sanction.
Lack of timely commencement of proceedings
Under the existing law, a company can approach the BIFR for adopting steps for its revival, on erosion of its entire net worth. The erosion of entire net worth is too late a stage to attempt restructuring as by the time the net worth is eroded the company is too sick to be revived and has lost its resilience to restructure and revive itself.
Poor enforcement mechanism
The mechanism for its implementation is so poor that violations take place fearlessly leaving no fear for law. The misuse of the said forum in making an entry by manipulating must be curbed by strict penal consequences for such misuse, which should be demonstrably used to ensure that no entity attempts to misuse these provisions. However, this aspect and solution to this problem has to be found out in the proposed legislation.
Misuse of protection against recovery proceedings
Under SICA, an automatic stay operates against all kind of recovery and distress proceedings against all creditors once the reference filed by the company is registered. This is the principal drawback of the existing legislation as this has led to BIFR becoming a haven for defaulting companies. Erring debtors have misused SICA to seek protection and moratorium from recovery proceedings. The companies are able to enter easily into the reference, sometimes by manipulating their accounts to reflect net worth erosion and are then able to attract immunity against the recovery action by the creditors and this benefit is then attempted to be perpetuated. Registration of reference is dependent upon the erosion of net worth and this can be achieved by accounting manipulations. The provisions for suspension of legal proceedings are misused and perpetuated.
This problem arises due to the fact that unscrupulous promoters enter into the process of rehabilitation by manipulating sickness; take undue benefits arising out of delay in decision making of BIFR. If the reference is rejected, a fresh reference is filed with respect to accounts for the next year and the cycle goes on endlessly. There is no fear of reprisal or punitive action against the companies indulging in this malpractice.
Lack of extra territorial jurisdiction
Indian insolvency laws do not have any extra-territorial jurisdiction, nor do they recognize the jurisdiction of foreign courts in respect of branches of foreign banks operating in India. Therefore, if a foreign company is taken into liquidation outside India, its Indian business will be treated as a separate matter and will not be automatically affected unless an application is filed before an insolvency Court for winding up of its branches in India.
The recommendations of the Eradi Committee have been translated into the Companies (Amendment) Bill, 2001 and the Sick Industrial Companies (Special Provisions) Repeal Bill, 2001 to mend these defects in the existing laws and the end result being tribunalization of justice. The Companies (Amendment) Bill, 2001 proposes amendment of Article 323B of the Constitution of India and provisions of Part VII of the Companies Act, 1956 for setting up of a National Company Law Tribunal (NCLT) and its Appellate Tribunal. The Bill proposes repeal of SICA and abolition of Company Law Board.
Though tribunalisation of justice is now a recognised trend, the India’s experiences with Tribunals have nothing to boast about. They have largely failed to serve the purpose with which they are set up. NCLT would be burdened with workload of enormous magnitude and in the process would be likely to lose focus on revival and rehabilitation of sick entities. Lastly, the misuse of the said forum in making an entry by manipulating/feigning sickness must be curbed by strict penal consequences for such misuse, which should be demonstrably used to ensure that no entity attempts to misuse these provisions. However, this aspect and solution to this problem has to be found out in the proposed legislation.
At present the Government is considering the adoption of UNCITRAL Model Law on Cross-Border Insolvency to meet the demands of globalisation of economy and to deal with international insolvency. This will radically change the orientation of Indian law and make it suitable for dealing with the challenges arising from globalisation and increasing integration of Indian economy with the world economy.
“The increasing incidence of cross-border insolvencies reflects the continuing global expansion of trade and investment. However, national insolvency laws have by and large not kept pace with the trend, and they are often ill equipped to deal with cases of a cross-border nature. This frequently results in inadequate and inharmonious legal approaches, which hamper the rescue of financially troubled businesses, are not conducive to fair and efficient administration of cross-border insolvencies, impede the protection of the assets of the insolvent debtor against dissipation, and hinder maximisation of the value of those assets.â€[17]
While drafting the substantive and procedural rules of bankruptcy, international standards for both national and cross-border insolvency should be taken into consideration which, based on Indian situation, should be suitably incorporated.
http://www.articlebin.com/view-Corporate_Insolvency_Laws_in_India-1767.html
Finding the Success in Failure
Failure does not exist at higher levels of awareness. Failure is experienced when the mind is focused on the physical life and present circumstances.
Thomas Edison succeeded with the invention of the light bulb by eliminating all the things that didn't work-more than a 1000 so called failures. Walt Disney created Disney Land from bankruptcy by successfully visiting over 400 banks before he found one that would lend him the money.
Neither one of these men focused on failure-in fact their minds were not focused in the physical world. Both of them had a dream and their minds were focused in the imagination where failure does not exist. It is a wonderful place where we have 100% control over the outcome, anything is possible and there are no limitations. If we stay focused we will always succeed. The so called failure comes from interpretation of the images into physical life and the failures are simply a process of elimination-taking away what does not work to get to what does work.
From the position of the silent observer (a place of quiet reflection), all steps you have taken lead you to this moment of awareness. From this place of observation there are just moments of success in the knowingness of all things are as they should be. What you perceive as failures are steps towards success. It is when you let go of the notion you have failed you will have found success. Your life can never be a failure-it always reflects your own thoughts. Even if you consider yourself a failure, you will find success in that belief. Your physical life will always demonstrate accurately what you believe. You can demonstrate what a failure looks like and be successful at it.
If you consider yourself a successful failure then it is relatively easy to move to another place. You have already arrived at where you said you now are. You were successful at getting there-at that moment of realization you can let go and begin to be successful at something else.
In your search for a certain grocery item, you stop into a store and do not find it-are you a failure or did you just make a poor choice. How would you know the store did not have the item you were searching for unless you stopped in-do you give up? You stop into three other stores and do not find what you are looking for, but you found two other items you have been searching for for months-is the trip a failure? Finally at the last stop you run into an old friend you have lost contact with-he invites you out to lunch and you order a dish which just happens to be made from the grocery item you were looking for.
Was this your original intension? From the place of the ego it would be a failure-you still didn't find the grocery item you set out to find in the form you desired. The truth is (your root thought) you wanted to consume it. If you let go of the thought of failure and look back on the events you will see your intentions worked out perfectly-in fact you got more than the ego bargained for. When you work from a higher level of consciousness you will know things always work out favorably-intention brings opportunity which brings success. You may have forgotten certain aspects of what you desired, but opportunity in time brings them all together in place-the right time and place.
Even when success is not immediate, you will get what you desire as long as you maintain the power of intention. Your intention will bring what you desire when the opportunity for its greatest rewards are ready for manifestation. We often consider our failure when we try to control our success. To be truly successful at creating, you must allow the spirit to create it without the interference of your mind-know that it will happen and it will. The creation process itself is too complicated for the physical mind to comprehend. The only thing you need to know are the three steps-thought, word, and deed. Imagine what you desire, declare it is what you wish to create and know you have it. That is so simply, yet it is too complicated for most conscious minds to comprehend. Most people when told of this process will first consider the failure of it-and it is what they will experience. It's just too simple, nothing works like that, they will snap their fingers and say-"see, I told you."
With practice one will be able to snap ones fingers and create on demand-once you let go of the notion you cannot. Your history texts and holy scripts are full of these stories. In hind site you will find these experiences in your own life. The only other thing getting in your way of this kind of success is your belief you "do not deserve" and somebody else does. This you will also experience successfully.
The universe is perfect, what you consider to be your creator is perfect, therefore the systems which are in place-the natural laws are perfect. Humanity comes into conflict with them because he does not understand the perfection. All things are created from mind, therefore all things are possible-you are mind-all things you imagine are possible unless you believe they are not.
Seven years ago I went bankrupt from a successful business. I lost sight of my success and refocused on poverty as the way of obtaining spiritual enlightenment-stupid move-you don't have to be poor to be spiritually aware. However, it was the path I chose. One of the greatest motivators of any belief system is it can be demonstrated that it works and brings you all that you desire.
In hindsight I can plainly see all things worked together to bring me the success I am enjoying today. I went from digging out coins in the phone both returns to buy supper-to publishing my first printed book this year. The book is now distributed in six difference countries and it's only the beginning. I have finished my next book and have started on the third-there are seven more to come. I had no writing experience when I started and the process has been a great learning experience and a lot of hard work.
As much as I have learned spiritually in the last seven years, I still have years of negativity to overcome or let go of. The system has clearly worked for me and it is observable. The only limitations to what I can create come from the years of being told I cannot have anything that I desire-but mostly from the fear of failure.
When I started out on my spiritual quest I let go of any thoughts of what I was experiencing as being "crazy" or "insane." I was, and still am willing to go there if it is what it takes. My books, ebooks and articles and now my work shops are filled with these thoughts that for many are controversial, pushing the limits, or for some just plain blasphemous.
From what may have appeared as failure come new insights, and new awareness I have always shared with others. The failure was not as it seemed at all-what I have achieved could not have been accomplished any other way. All turns brought me to this place I now find myself in. This does not exclude me from life, but brings me closer to it, to its magnificence and perfection. Once again I am reminded of the Buddhist saying, "Before enlightenment comes chopping wood and carrying water-after enlightenment comes chopping wood and carrying water." There are no failures in life unless you believe there are. All failures are successful steps leading to something better. Once you have obtained failure, success is the next step.
In every step you call failure are the seeds to your next success. Learn to see all the things you do in your lifetime as successful, and success is all you will experience. Failure is just a word-it is how you experience it that makes the difference. Even people who demonstrate abundance and success have failed if what they have created has not brought them what they truly desired. It is simply a demonstration of what they have chosen to manifest success. It may be a process of elimination and not an end unto itself.
It is not possible to accurately judge the choices of others-what appears failure to one is actually success in progress to another. Self judgment is worse than any judgment declared by another because it is personal and you believe it. Judgment by another is simply a demonstration of personal thoughts and is not your truth. Judgment is never a correct observation of any circumstance.
Failure is merely success in motion-learn to accept it, and know it is leading to something better.
http://www.articlebin.com/view-Finding_the_Success_in_Failure-36780.html
Thomas Edison succeeded with the invention of the light bulb by eliminating all the things that didn't work-more than a 1000 so called failures. Walt Disney created Disney Land from bankruptcy by successfully visiting over 400 banks before he found one that would lend him the money.
Neither one of these men focused on failure-in fact their minds were not focused in the physical world. Both of them had a dream and their minds were focused in the imagination where failure does not exist. It is a wonderful place where we have 100% control over the outcome, anything is possible and there are no limitations. If we stay focused we will always succeed. The so called failure comes from interpretation of the images into physical life and the failures are simply a process of elimination-taking away what does not work to get to what does work.
From the position of the silent observer (a place of quiet reflection), all steps you have taken lead you to this moment of awareness. From this place of observation there are just moments of success in the knowingness of all things are as they should be. What you perceive as failures are steps towards success. It is when you let go of the notion you have failed you will have found success. Your life can never be a failure-it always reflects your own thoughts. Even if you consider yourself a failure, you will find success in that belief. Your physical life will always demonstrate accurately what you believe. You can demonstrate what a failure looks like and be successful at it.
If you consider yourself a successful failure then it is relatively easy to move to another place. You have already arrived at where you said you now are. You were successful at getting there-at that moment of realization you can let go and begin to be successful at something else.
In your search for a certain grocery item, you stop into a store and do not find it-are you a failure or did you just make a poor choice. How would you know the store did not have the item you were searching for unless you stopped in-do you give up? You stop into three other stores and do not find what you are looking for, but you found two other items you have been searching for for months-is the trip a failure? Finally at the last stop you run into an old friend you have lost contact with-he invites you out to lunch and you order a dish which just happens to be made from the grocery item you were looking for.
Was this your original intension? From the place of the ego it would be a failure-you still didn't find the grocery item you set out to find in the form you desired. The truth is (your root thought) you wanted to consume it. If you let go of the thought of failure and look back on the events you will see your intentions worked out perfectly-in fact you got more than the ego bargained for. When you work from a higher level of consciousness you will know things always work out favorably-intention brings opportunity which brings success. You may have forgotten certain aspects of what you desired, but opportunity in time brings them all together in place-the right time and place.
Even when success is not immediate, you will get what you desire as long as you maintain the power of intention. Your intention will bring what you desire when the opportunity for its greatest rewards are ready for manifestation. We often consider our failure when we try to control our success. To be truly successful at creating, you must allow the spirit to create it without the interference of your mind-know that it will happen and it will. The creation process itself is too complicated for the physical mind to comprehend. The only thing you need to know are the three steps-thought, word, and deed. Imagine what you desire, declare it is what you wish to create and know you have it. That is so simply, yet it is too complicated for most conscious minds to comprehend. Most people when told of this process will first consider the failure of it-and it is what they will experience. It's just too simple, nothing works like that, they will snap their fingers and say-"see, I told you."
With practice one will be able to snap ones fingers and create on demand-once you let go of the notion you cannot. Your history texts and holy scripts are full of these stories. In hind site you will find these experiences in your own life. The only other thing getting in your way of this kind of success is your belief you "do not deserve" and somebody else does. This you will also experience successfully.
The universe is perfect, what you consider to be your creator is perfect, therefore the systems which are in place-the natural laws are perfect. Humanity comes into conflict with them because he does not understand the perfection. All things are created from mind, therefore all things are possible-you are mind-all things you imagine are possible unless you believe they are not.
Seven years ago I went bankrupt from a successful business. I lost sight of my success and refocused on poverty as the way of obtaining spiritual enlightenment-stupid move-you don't have to be poor to be spiritually aware. However, it was the path I chose. One of the greatest motivators of any belief system is it can be demonstrated that it works and brings you all that you desire.
In hindsight I can plainly see all things worked together to bring me the success I am enjoying today. I went from digging out coins in the phone both returns to buy supper-to publishing my first printed book this year. The book is now distributed in six difference countries and it's only the beginning. I have finished my next book and have started on the third-there are seven more to come. I had no writing experience when I started and the process has been a great learning experience and a lot of hard work.
As much as I have learned spiritually in the last seven years, I still have years of negativity to overcome or let go of. The system has clearly worked for me and it is observable. The only limitations to what I can create come from the years of being told I cannot have anything that I desire-but mostly from the fear of failure.
When I started out on my spiritual quest I let go of any thoughts of what I was experiencing as being "crazy" or "insane." I was, and still am willing to go there if it is what it takes. My books, ebooks and articles and now my work shops are filled with these thoughts that for many are controversial, pushing the limits, or for some just plain blasphemous.
From what may have appeared as failure come new insights, and new awareness I have always shared with others. The failure was not as it seemed at all-what I have achieved could not have been accomplished any other way. All turns brought me to this place I now find myself in. This does not exclude me from life, but brings me closer to it, to its magnificence and perfection. Once again I am reminded of the Buddhist saying, "Before enlightenment comes chopping wood and carrying water-after enlightenment comes chopping wood and carrying water." There are no failures in life unless you believe there are. All failures are successful steps leading to something better. Once you have obtained failure, success is the next step.
In every step you call failure are the seeds to your next success. Learn to see all the things you do in your lifetime as successful, and success is all you will experience. Failure is just a word-it is how you experience it that makes the difference. Even people who demonstrate abundance and success have failed if what they have created has not brought them what they truly desired. It is simply a demonstration of what they have chosen to manifest success. It may be a process of elimination and not an end unto itself.
It is not possible to accurately judge the choices of others-what appears failure to one is actually success in progress to another. Self judgment is worse than any judgment declared by another because it is personal and you believe it. Judgment by another is simply a demonstration of personal thoughts and is not your truth. Judgment is never a correct observation of any circumstance.
Failure is merely success in motion-learn to accept it, and know it is leading to something better.
http://www.articlebin.com/view-Finding_the_Success_in_Failure-36780.html
Divorce, Debt & Credit... Facts you need to know
Before a divorce, during, and after getting a divorce you need to concern yourself with credit... credit establishment, credit files and credit scores. Though divorce and credit is a concern for both men and woman, woman tend to have the greater credit difficulty due to societal standards. Therefore, I encourage woman of any age or marital status to learn as much as possible from this and other articles.
But for all men and woman, essential credit and financial matters must be addressed when contemplating a divorce in order for either and/or both parties to fiscally survive. Even if legally divorced, until finances are divorced, there is still a partnership as will soon be apparent.
Here are some key points concerning credit that should be dealt with.
Joint Accounts - Joint Responsibility
The Federal Trade commission says: "If you're considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it's important to make regular payments so your credit record won't suffer. As long as there's an outstanding balance on a joint account, you and your spouse are responsible for it."
If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Ask the creditor to convert these accounts to individual accounts.
By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.
SPECIAL NOTE: any time you open an individual account, you may authorize another person to use it. A creditor who reports (good or bad) credit history to a credit bureau, will report it in the file of any person you have named as "authorized user" as well as your own file.
BEWARE - Defaulting on a Joint Account
Regardless of any court decision, if one joint account holder defaults on a loan, I guarantee the creditor will not care who the court ordered to pay it. The creditor will definitely come after the other joint account holder. Even if declaring bankruptcy, a creditor will make every effort to reclaim their lost revenue or property from the surviving spouse.
Therefore be fully aware that if a creditor does not agree to transfer joint accounts to an individual, then both of you are still responsible for full repayment to the creditor, regardless of how you've agreed to split the bills in the divorce settlement. If a spouse fails to make a payment, a creditor will come after the remaining joint holder, regardless of any divorce agreement. Additionally both joint holders will have negative comments on their credit file regardless of fault.
Experian Offers Tips
Experian says, "There are several ways you can prevent credit obligations from making divorce more difficult - and reestablish your own distinct credit lines after divorce occurs. You may wish to consider the following:
Communicate with your ex-spouse. Make as clean a financial cut as possible.
Communicate with your creditors. Decide which credit belongs to whom, then ask each company and bank that extended you credit to transfer the debt to the name of the person who will be responsible.
During divorce negotiations, keep your joint bills current, even if you ultimately will have no responsibility for the debt. If you don't, your creditors could become more reluctant to release one party from joint liability.
Ask the credit grantor to remove your spouse's name as an authorized user or close the joint account to additional charges.
If your spouse runs up large amounts of debt, you should cancel as many of the accounts as possible. Inform all creditors, in writing, that you are not responsible for these debts. This may not prevent them from trying to collect, but it does show that you attempted to act responsibly.
Upon your divorce settlement, you and your ex-spouse might consider obtaining individual consolidation loans to cover your share of the joint bills. Pay off the joint bills with your individual loans and close all joint accounts. This helps ensure you'll be responsible only for those bills you agreed to pay. It also will help you establish or reestablish credit in your own name. "
Other Points To Ponder
Though critically important for surviving this terrible time, emotions and so many other issues divert attention away from personal credit and its impact. Here then is a checklist and summary for a potential divorce in order to best protect your credit and rating.
1. Get a bank account in your name only.
2. Get at least one unsecured credit card in your name only. At a minimum get a secured credit card but in your name only. (This should occur whether divorcing or not.)
3. Ask to freeze any joint accounts with an outstanding asset or liability (bank, credit card, loans, etc.) so that both signatures are required before any transactions can be made.
4. Notify all creditors in writing (and call them) Document dates and who spoken to:
Have joint accounts closed if a zero balance or if possible have the account placed in the primary responsible party's name only;
Instruct all creditors that you want all authorized users removed except the primary holder;
Inform all creditors you are not responsible for charges from that point on if not in your name.
The primary party may have to re-qualify with the lender. This also means whoever will be responsible for a mortgage will probably have to refinance in order to remove the secondary party's responsibility.
5. Get copies of your 3 credit reports and inform all credit bureaus when the divorce is final. Make every effort to separate your credit file from that of your former spouse.
MyVesta and Divorce.net
MyVesta.org adds the following great suggestions
"Make sure your name is listed on your utility accounts, an item often overlooked by many. When you go to get credit, they often look to see if you have a phone number in your name. If you don't, even if you are listed in the phone book at that number, it can be problematic.
"Before signing the divorce papers, consider one addendum: change of name authorization. Crazy as it seems, many states require your ex-spouse's signature before issuing you a driver's license or other ID in a previous or maiden name. Men who added hyphens during marriage could encounter identity trouble, as well."
Divorce.net offers very fitting final thoughts.
"Your spouse may be in contempt of court for disobeying a court order that requires him [or her] to pay certain bills. However, if you are jointly liable to a creditor as in the case of a mortgage or co-signed credit applications, your spouse’s contempt of court is NO EXCUSE for your non-payment. It simply isn’t a legally sufficient defense to say, “It’s no longer my responsibility because the court ordered my spouse to pay.”
And from yours truly I add this. Until you are financially divorced with your own credit established, you remain tied to your former spouse. Divorce is not the tidy little package some people would like to think it is. It is not simply a matter of walking out one day. Over and above issues of child support and alimony, there are other financial ramifications beyond the emotional ones. The greater the communication at these times on both parts, the less of an impact there will be to both parties and the sooner the final separation will occur.
Communication is critical in a marriage. It is just as critical in a divorce.
http://www.articlebin.com/view-Divorce__Debt__Credit____Facts_you_need_to_know-42895.html
But for all men and woman, essential credit and financial matters must be addressed when contemplating a divorce in order for either and/or both parties to fiscally survive. Even if legally divorced, until finances are divorced, there is still a partnership as will soon be apparent.
Here are some key points concerning credit that should be dealt with.
Joint Accounts - Joint Responsibility
The Federal Trade commission says: "If you're considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it's important to make regular payments so your credit record won't suffer. As long as there's an outstanding balance on a joint account, you and your spouse are responsible for it."
If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Ask the creditor to convert these accounts to individual accounts.
By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.
SPECIAL NOTE: any time you open an individual account, you may authorize another person to use it. A creditor who reports (good or bad) credit history to a credit bureau, will report it in the file of any person you have named as "authorized user" as well as your own file.
BEWARE - Defaulting on a Joint Account
Regardless of any court decision, if one joint account holder defaults on a loan, I guarantee the creditor will not care who the court ordered to pay it. The creditor will definitely come after the other joint account holder. Even if declaring bankruptcy, a creditor will make every effort to reclaim their lost revenue or property from the surviving spouse.
Therefore be fully aware that if a creditor does not agree to transfer joint accounts to an individual, then both of you are still responsible for full repayment to the creditor, regardless of how you've agreed to split the bills in the divorce settlement. If a spouse fails to make a payment, a creditor will come after the remaining joint holder, regardless of any divorce agreement. Additionally both joint holders will have negative comments on their credit file regardless of fault.
Experian Offers Tips
Experian says, "There are several ways you can prevent credit obligations from making divorce more difficult - and reestablish your own distinct credit lines after divorce occurs. You may wish to consider the following:
Communicate with your ex-spouse. Make as clean a financial cut as possible.
Communicate with your creditors. Decide which credit belongs to whom, then ask each company and bank that extended you credit to transfer the debt to the name of the person who will be responsible.
During divorce negotiations, keep your joint bills current, even if you ultimately will have no responsibility for the debt. If you don't, your creditors could become more reluctant to release one party from joint liability.
Ask the credit grantor to remove your spouse's name as an authorized user or close the joint account to additional charges.
If your spouse runs up large amounts of debt, you should cancel as many of the accounts as possible. Inform all creditors, in writing, that you are not responsible for these debts. This may not prevent them from trying to collect, but it does show that you attempted to act responsibly.
Upon your divorce settlement, you and your ex-spouse might consider obtaining individual consolidation loans to cover your share of the joint bills. Pay off the joint bills with your individual loans and close all joint accounts. This helps ensure you'll be responsible only for those bills you agreed to pay. It also will help you establish or reestablish credit in your own name. "
Other Points To Ponder
Though critically important for surviving this terrible time, emotions and so many other issues divert attention away from personal credit and its impact. Here then is a checklist and summary for a potential divorce in order to best protect your credit and rating.
1. Get a bank account in your name only.
2. Get at least one unsecured credit card in your name only. At a minimum get a secured credit card but in your name only. (This should occur whether divorcing or not.)
3. Ask to freeze any joint accounts with an outstanding asset or liability (bank, credit card, loans, etc.) so that both signatures are required before any transactions can be made.
4. Notify all creditors in writing (and call them) Document dates and who spoken to:
Have joint accounts closed if a zero balance or if possible have the account placed in the primary responsible party's name only;
Instruct all creditors that you want all authorized users removed except the primary holder;
Inform all creditors you are not responsible for charges from that point on if not in your name.
The primary party may have to re-qualify with the lender. This also means whoever will be responsible for a mortgage will probably have to refinance in order to remove the secondary party's responsibility.
5. Get copies of your 3 credit reports and inform all credit bureaus when the divorce is final. Make every effort to separate your credit file from that of your former spouse.
MyVesta and Divorce.net
MyVesta.org adds the following great suggestions
"Make sure your name is listed on your utility accounts, an item often overlooked by many. When you go to get credit, they often look to see if you have a phone number in your name. If you don't, even if you are listed in the phone book at that number, it can be problematic.
"Before signing the divorce papers, consider one addendum: change of name authorization. Crazy as it seems, many states require your ex-spouse's signature before issuing you a driver's license or other ID in a previous or maiden name. Men who added hyphens during marriage could encounter identity trouble, as well."
Divorce.net offers very fitting final thoughts.
"Your spouse may be in contempt of court for disobeying a court order that requires him [or her] to pay certain bills. However, if you are jointly liable to a creditor as in the case of a mortgage or co-signed credit applications, your spouse’s contempt of court is NO EXCUSE for your non-payment. It simply isn’t a legally sufficient defense to say, “It’s no longer my responsibility because the court ordered my spouse to pay.”
And from yours truly I add this. Until you are financially divorced with your own credit established, you remain tied to your former spouse. Divorce is not the tidy little package some people would like to think it is. It is not simply a matter of walking out one day. Over and above issues of child support and alimony, there are other financial ramifications beyond the emotional ones. The greater the communication at these times on both parts, the less of an impact there will be to both parties and the sooner the final separation will occur.
Communication is critical in a marriage. It is just as critical in a divorce.
http://www.articlebin.com/view-Divorce__Debt__Credit____Facts_you_need_to_know-42895.html
Money Talk or “Debt Us Do Part”
Whether you are thinking of getting married, you are a newly wed, or you are a seasoned couple of marital bliss, you must have a joint talk about debt and credit. Debt communication is simply not an option. This debt and money talk article can open doors of communication and enhance the success of your marriage. In the case of pre marital situations, it may allow you to realize "problems" before they even start.
In David Olson’s 2003 National Survey of Marital Strengths we learn that the average adult spends 80% of waking hours earning, spending, or thinking about money. In a study of 21,501 couples Olson found that 66% indicated indebtedness was one of the top 5 major stumbling blocks to their marriage.
Conversely, he discovered "one of the unique strengths of the majority of happy couples was that they did not have major debt problems." Similarly the Administration office of the US Courts tell us there were 1,661,996 bankruptcies filed in Fiscal Year 2003 (up 7.4 percent from the 1,547,669 filings in Fiscal Year 2002). Bankruptcies have exceeded 1 million filings annually since the early 90's and show no signs of letting up.
All of the above strongly indicates one thing. Far more financial communication must occur in the relationship.
To overcome some of these staggering statistics, I firmly believe each couple has a superior chance of surviving separation and/or divorce because of financial stress, by simply opening the doors of financial communication. I strongly suggest 4 areas of communication for any couple regardless of how long they have been together. But the sooner in a couple's existence that communication occurs, the greater the opportunity of success for that couple and the less the stress level within their lives.
Here then are 4 suggested areas of financial communication:
1. Hidden Debt and Personalities - openly and without prejudice or pre-judgment
a. Share each other’s credit report and ask questions about past performances. For example: Why are there late pays? Why is there no credit history? Explain the bankruptcy. What is this judgment about?
b. Determine and discuss each person's ability to be a spender or a saver. Do you have a tendency to live paycheck to paycheck or do you have a consuming desire to put at least something away for a rainy day? Do you track every dime or is anything under $10 unimportant to track?
c. Discuss any debts not listed in the credit report.
d. Determine who has what credit lines and what is each person’s feelings on separate credit lines, joint lines, becoming an authorized user and/or co-signing any loans. Similarly discuss checking and savings accounts.
e. Discuss who has what assets and should they be kept separated or joined. (Should there be a pre-nuptial agreement?)
2. Goal Setting - where are you going and how will you know when you get there?
a. Set specific goals together for the next year, 5 years, and 20 years.
b. Read and discuss 5 Proven Steps To Budget Motivation (as well as other Budget Management articles under Article Index above.)
c. Commit a plan of action to paper stating how you will be accomplishing your goals.
d. List contingency plans when the inevitable “never expected emergency” pops up.
Budgeting and CEO - Who will carry the ball?
a. Who will have responsibility for paying the bills and balancing the checkbook?
b. How will you deal with existing bills? Especially for newlyweds? Will each continue to pay individually or will you join incomes to meet expenses?
c. Together plan out your budget
d. Frankly discuss “what if's”.
1. No one plans on bankruptcy but what if the bottom falls out? Will you both declare so the one spouse does not have to absorb the other's debt?
2. What if divorce does happen?
3. What if one spouse dies or becomes disabled?
“What if...” and fill in the rest.
4. Will one person be assigned to listen to the partner but ultimately make the final financial decision or will both have an equal voice?
Estate Planning
1. Discuss the existing life, health, and disability needs of each partner. Does it meet current and future needs?
2. Talk to a reputable health and disability representative and determine your needs.
3. Based upon your future goals, what investment strategies do you intend on initiating and when?
4. Who will do your taxes and do you need tax strategies to offset tax payment?
5. How will you develop an emergency savings and how much will it be?
6. Are there education needs expected?
Now for the ultimate marriage counseling tip. Reschedule this exact same discussion for next year and the year after and the year after that. Just call it your "Annual State of the Union Discussion".
http://www.articlebin.com/view-Money_Talk_or_%E2%80%9CDebt_Us_Do_Part%E2%80%9D-45797.html
In David Olson’s 2003 National Survey of Marital Strengths we learn that the average adult spends 80% of waking hours earning, spending, or thinking about money. In a study of 21,501 couples Olson found that 66% indicated indebtedness was one of the top 5 major stumbling blocks to their marriage.
Conversely, he discovered "one of the unique strengths of the majority of happy couples was that they did not have major debt problems." Similarly the Administration office of the US Courts tell us there were 1,661,996 bankruptcies filed in Fiscal Year 2003 (up 7.4 percent from the 1,547,669 filings in Fiscal Year 2002). Bankruptcies have exceeded 1 million filings annually since the early 90's and show no signs of letting up.
All of the above strongly indicates one thing. Far more financial communication must occur in the relationship.
To overcome some of these staggering statistics, I firmly believe each couple has a superior chance of surviving separation and/or divorce because of financial stress, by simply opening the doors of financial communication. I strongly suggest 4 areas of communication for any couple regardless of how long they have been together. But the sooner in a couple's existence that communication occurs, the greater the opportunity of success for that couple and the less the stress level within their lives.
Here then are 4 suggested areas of financial communication:
1. Hidden Debt and Personalities - openly and without prejudice or pre-judgment
a. Share each other’s credit report and ask questions about past performances. For example: Why are there late pays? Why is there no credit history? Explain the bankruptcy. What is this judgment about?
b. Determine and discuss each person's ability to be a spender or a saver. Do you have a tendency to live paycheck to paycheck or do you have a consuming desire to put at least something away for a rainy day? Do you track every dime or is anything under $10 unimportant to track?
c. Discuss any debts not listed in the credit report.
d. Determine who has what credit lines and what is each person’s feelings on separate credit lines, joint lines, becoming an authorized user and/or co-signing any loans. Similarly discuss checking and savings accounts.
e. Discuss who has what assets and should they be kept separated or joined. (Should there be a pre-nuptial agreement?)
2. Goal Setting - where are you going and how will you know when you get there?
a. Set specific goals together for the next year, 5 years, and 20 years.
b. Read and discuss 5 Proven Steps To Budget Motivation (as well as other Budget Management articles under Article Index above.)
c. Commit a plan of action to paper stating how you will be accomplishing your goals.
d. List contingency plans when the inevitable “never expected emergency” pops up.
Budgeting and CEO - Who will carry the ball?
a. Who will have responsibility for paying the bills and balancing the checkbook?
b. How will you deal with existing bills? Especially for newlyweds? Will each continue to pay individually or will you join incomes to meet expenses?
c. Together plan out your budget
d. Frankly discuss “what if's”.
1. No one plans on bankruptcy but what if the bottom falls out? Will you both declare so the one spouse does not have to absorb the other's debt?
2. What if divorce does happen?
3. What if one spouse dies or becomes disabled?
“What if...” and fill in the rest.
4. Will one person be assigned to listen to the partner but ultimately make the final financial decision or will both have an equal voice?
Estate Planning
1. Discuss the existing life, health, and disability needs of each partner. Does it meet current and future needs?
2. Talk to a reputable health and disability representative and determine your needs.
3. Based upon your future goals, what investment strategies do you intend on initiating and when?
4. Who will do your taxes and do you need tax strategies to offset tax payment?
5. How will you develop an emergency savings and how much will it be?
6. Are there education needs expected?
Now for the ultimate marriage counseling tip. Reschedule this exact same discussion for next year and the year after and the year after that. Just call it your "Annual State of the Union Discussion".
http://www.articlebin.com/view-Money_Talk_or_%E2%80%9CDebt_Us_Do_Part%E2%80%9D-45797.html
bankruptcy facts
Knowing that you need to better understand this topic I recommend that you take Five minutes to read what we have to say. Since bankruptcy is a place that seems to be hit more people it is best to know some bankruptcy facts. These facts can help you to understand what happens when you claim to be bankrupt. The first fact that you will need to interpret is that filing for bankruptcy is not the end of the world. Bankruptcy is a way for you to suspend the dissimilar debt collections that are being carried out in your life during the time that you have in some way managed to roll up lots of debts. Once you have filed for bankruptcy the tribunal will allow an automatic stay order. This stay order will keep the dissimilar debt collection agencies from trying to collect their debts while the tribunal is looking into your tangled up finances. According to the known bankruptcy facts, during the time of your failure money cannot be collected from you by your creditors. These individuals will need to talk to your attorney to find data about the debt payment. These creditors can sooner or later petition the court for alleviation from the stay order. This alleviation order will provide them with the ability to collect any secured debts that you have written over to them. This is the only way that these creditors can collect money, property and assets from you. By knowing about bankruptcy facts like this you can make sure that you are careful about assignment your property as security measures to credit companies. There is another failure fact that you should know about. In this fact once your failure payments have been fully paid off you will be released from further debt payments. At this point former creditors will no longer have any claim on you and they can not force you to pay any more of the former debts. Even so if you do happen to get into credit difficulties with these same creditors once more they will have the right to search compensation for these new debts that you have incurred. As you look through the various bankruptcy facts and advice, you will see that in most cases your assets that can be turned into immediate payment must be turned over to a bankruptcy trustee. This judicature decreed person will make sure that you are paying off your debt in a sensible manner. You disposable assets once they have been liquidated will be distributed amongst your creditors. This is also another way for you to drop your bankruptcy charges. There are many other bankruptcy facts that can help you to keep off being in trouble with the various people to whom you owe money. You just need to talk with your attorney for help. Thank you for Taking the time to read my article it is greatly appreciated. Try searching through my other articles.
http://www.articlebin.com/view-bankruptcy_facts-47898.html
http://www.articlebin.com/view-bankruptcy_facts-47898.html
Direct Mail Marketing – Can it Really Pay Off? Step 1: Researching Your Target Market
Maybe you have thought about direct mail. Maybe you have wondered whether it could work for you. Maybe you have done it, but it never really paid off. Possibly you thought there was so much to learn that you didn’t know where to start. Whatever your particular ‘story’ is you are reading this. And yes, there are a million and one ways to do something wrong – but there are only a handful of ways to get it right. In this article, I will show you what has brought success to hundreds of mortgage brokers and how direct mail marketing can work for you.
My goal in this article is to help you get started by helping you figure out WHO you should be mailing to and WHAT product to promote to them. In fact – I will be writing a series of articles taking you all the way from the research to the tracking of the results and your return on investment. There will be practical exercises for you to do in between the next issues, so roll up your sleeves and get ready to start cooking – or start rolling in the dough.
I’ve literally dealt with the marketing of thousands of mortgage brokers and one thing is certain… Once you guys start doing really well financially you want to branch out on your own and start your own company. However, most brokers haven’t taken Marketing 101, so they tend to fail. Not because they aren’t good brokers, but because they aren’t good marketers. In fact, it is not only a trend I see in the Mortgage Industry, but many other industries as well. To tell you the truth, with all that I know about marketing I’m confident that I could make ANY business successful. Sounds pretty cocky but hands down, I could do it. Because I know marketing.
Why do I know that I could make it successful? Because I learned something vitally important: outbound communication is key. It is more important then what you receive. You will generate interest and credibility the more you communicate and the more you communicate repeatedly.
But not just to anybody. Why would you communicate to folks that have no reason to buy a home or refinance their home if you were a mortgage broker? How will you go about defining your target market? What is the scientific approach to choosing your mailing list?
On the outset, that may seem easy. Just advertise your subprime product to a subprime list. Or maybe not. But you do not want to guess on this. You need solid evidence. The best way to get that evidence is via your own records – your past closes and what it was you sold and to whom. What you are looking for is twofold:
1) Your easiest-to-close customers and
2) Customers that financed with your highest income-generating products.
To recap in mid-stream let me give you four key data to latch onto:
1) Outbound communication is key.
2) Repeated communication is vital.
3) Your easiest-to-close customers should be promoted to first.
4) Your highest income-generating products should be next in line to promote.
Now let’s get started. Research which product you need to market.
When you start researching, you really shouldn’t go off of assumptions. Ideally you’ll go through your client list and tabulate which product you sold the most of. Was it prime? Subprime? Re-fi? Jumbo? Most of the time, you really have to do a sincere survey. You are looking to market the product that makes you the most income the quickest FIRST.
Exactly how should you do the research?
Create a spreadsheet and go through all of your past closes over the last year. List them out: Product X, Product Y, Product Z and so on – find every close you made over the few year and mark down which product it was and what you earned off of it. Also note down HOW MANY of that product you sold.
Example Tabulation:
Product X: Earned 1% Sold 8
Product Y: Earned $900 Sold 20
Product Z: Earned ½% Sold 12
Using the above example it is easy to see that Product ‘Y’ is what you should be marketing in your direct mail campaign. We’ll consider product ‘Y’ your bread and butter. Obviously these are the easiest to close so let’s create as many leads as we can and assume you’ll close them up.
Once you’re grooving right along with that product (and we’ll get to the target market in a few paragraphs) use the same spreadsheet to determine which product yielded the highest commissions. Maybe product ‘X’ averaged around $2000 per close but with only five sold you’re still doing better with ‘Y’, economically speaking. BUT if you just increase the number of leads that would need or desire product ‘X’ you could really start raking it in, right?
Do you see where I’m going with this? Haphazardly, with little or no direct mail – perhaps with referrals only – you’re managing to sell certain products to certain demographics. Of course, in reality, it will be many more than three different products which is why you need to go about this systematically.
However, once you start promoting product ‘Y’ and you start receiving an abundance of leads, DO NOT stop promoting that product just because you now have some more business. Keep on putting out that communication repeatedly and additionally market to the next product to the target market. We’re going for abundance here. When you’ve got an abundance of business, it is much easier to solve whatever problems arise with that than the type of problems that come from having a scarcity of business.
Learning a subject is all about wrapping your wits around the key principles involved and building upon those. Wrap your wits around this and you will be on your way to becoming a marketing expert.
Now that you know which product to start with, you have to know who is going to buy it, which comes to our next step.
Research to find who the audience is that you are going to sell to.
Not all audiences are the same. Take for example the TV show, Showtime at the Apollo. Not everyone would want to watch that. Just like there is a totally different target audience for American Idol. (If you never heard of these, then more than likely you aren’t their audience.) Case in point: you have to determine who your audience is, which is called a “market”. A “market” is a type of audience, a type of user. Figure out everything you can about that particular market that buys your main (what you sell the most of) product. The good thing is that you already have access to all their data – age ranges, credit scores, income, etc. It is time to add this data to your spread sheet.
Product X: Earned 1% Sold 8
Product Y: Earned $900 Sold 20
Product Z: Earned ½% Sold 12
Credit ranges
Age ranges
Income level
Once you have the demographics of the people that buy your “easiest-to-sell” product, you can then buy a list of that particular type of audience. You can go to a list company that you feel good about or have gotten recommendations for, and buy a list of people within those specific criteria. Get a list in a certain zip code or a certain mile radius around your office. (I have found that in more rural areas you will have to do a larger mileage radius than you would have to in a more urban area – it depends on the population.)
The reason you want to do such a thorough job of finding out who you are selling to is that 40% of your marketing campaign’s success (success meaning whether or not you get a good response) is dependent on your list. 40%! That is a big percentage to mess up on at the get-go. Besides, it is your list and the postage that are going to be the most expensive parts of your direct mail campaign. I cannot stress enough the importance of a good list – it makes all the difference in the world.
Here is an excellent case study of a company of mortgage professionals called Priority Financial Services that did exactly what I have been writing about here. They did an exhaustive research of what type of product they should focus on offering and what type of consumer would reach for their services.
Ervin Kowitz and Brian Kowitz are the owners of PFS. Their specialties include "no income qualifier" loans and loans for those without an income. They have a great deal of experience and expertise for those borrowers with credit problems including bankruptcy and foreclosure. With over 12,000 loans closed since 1994, they had quite a history that helped them determine the type of customer that they decided to focus on. Coupling their own internal study with market research and data retrieval from a source of strategic partners, Ervin and Brian were able to focus on a sector of the market whose need was the biggest segment of the growing market and truly specialize in it. This will vary for your particular business or area, but you can ascertain your niche in the same or similar way that they did.
The question they asked themselves was, ‘what was the most valuable asset that their business had’. Contrary to the usual answers of inventory, lease or even employees – even though employees are very high on the list, Ervin and Brian determined that their actual client base was their most valuable asset with their employees running a close 2nd. Once they determined this, they were on the right track to determining their niche.
PFS determined via their client base where their best clients were coming from and also analyzed where they were getting their best return. They saw a tremendous need in their customer base for financing for credit challenged individuals. Being primarily in the sub-prime market, Ervin and Brian further targeted a highly unique sector of the mortgage business – bankruptcies. They had spent 11 years dealing with the ‘ins and outs’ of bankruptcies, so much that 41% of their business was that specialized market. When this was unearthed, they had found their niche.
Niches can be very selective and they can be very broad as Ervin and Brian discovered. Even though they researched and found their niche, every issue they are presented with is unique. Though they offer many different products for their specialized market, they have been able to create a “service” niche. Through their creativity and understanding of the needs of their credit-challenged clients, they have been able to create literally a road map for each individual customer that is specific to them and in their best interest.
Priority Financial Service’s research may be very different than the research you need to do. The important thing is to comb through your files and take a look for the biggest commonalities and find out all you can about that product, market or trend you discover. You will have your own realization and you’ll be able to better define your target market and what particular products you need to concentrate your efforts on. Being everything to all people doesn’t necessarily communicate in marketing. People want to know what you can do for them specifically and when you are able to communicate that to a specific group – bingo! You just hit the jack pot.
In my next article,“Direct Mail Marketing-Can It Really Pay Off -Part Two”, I will teach you how to create copy (text, verbiage) in your promotional material to really get your message across to your target market in order to get a response. In the meantime, you have some homework to do. Happy Hunting!
http://www.articlebin.com/view-Direct_Mail_Marketing_%E2%80%93_Can_it_Really_Pay_Off__Step_1__Researching_Your_Target_Market-59736.html
My goal in this article is to help you get started by helping you figure out WHO you should be mailing to and WHAT product to promote to them. In fact – I will be writing a series of articles taking you all the way from the research to the tracking of the results and your return on investment. There will be practical exercises for you to do in between the next issues, so roll up your sleeves and get ready to start cooking – or start rolling in the dough.
I’ve literally dealt with the marketing of thousands of mortgage brokers and one thing is certain… Once you guys start doing really well financially you want to branch out on your own and start your own company. However, most brokers haven’t taken Marketing 101, so they tend to fail. Not because they aren’t good brokers, but because they aren’t good marketers. In fact, it is not only a trend I see in the Mortgage Industry, but many other industries as well. To tell you the truth, with all that I know about marketing I’m confident that I could make ANY business successful. Sounds pretty cocky but hands down, I could do it. Because I know marketing.
Why do I know that I could make it successful? Because I learned something vitally important: outbound communication is key. It is more important then what you receive. You will generate interest and credibility the more you communicate and the more you communicate repeatedly.
But not just to anybody. Why would you communicate to folks that have no reason to buy a home or refinance their home if you were a mortgage broker? How will you go about defining your target market? What is the scientific approach to choosing your mailing list?
On the outset, that may seem easy. Just advertise your subprime product to a subprime list. Or maybe not. But you do not want to guess on this. You need solid evidence. The best way to get that evidence is via your own records – your past closes and what it was you sold and to whom. What you are looking for is twofold:
1) Your easiest-to-close customers and
2) Customers that financed with your highest income-generating products.
To recap in mid-stream let me give you four key data to latch onto:
1) Outbound communication is key.
2) Repeated communication is vital.
3) Your easiest-to-close customers should be promoted to first.
4) Your highest income-generating products should be next in line to promote.
Now let’s get started. Research which product you need to market.
When you start researching, you really shouldn’t go off of assumptions. Ideally you’ll go through your client list and tabulate which product you sold the most of. Was it prime? Subprime? Re-fi? Jumbo? Most of the time, you really have to do a sincere survey. You are looking to market the product that makes you the most income the quickest FIRST.
Exactly how should you do the research?
Create a spreadsheet and go through all of your past closes over the last year. List them out: Product X, Product Y, Product Z and so on – find every close you made over the few year and mark down which product it was and what you earned off of it. Also note down HOW MANY of that product you sold.
Example Tabulation:
Product X: Earned 1% Sold 8
Product Y: Earned $900 Sold 20
Product Z: Earned ½% Sold 12
Using the above example it is easy to see that Product ‘Y’ is what you should be marketing in your direct mail campaign. We’ll consider product ‘Y’ your bread and butter. Obviously these are the easiest to close so let’s create as many leads as we can and assume you’ll close them up.
Once you’re grooving right along with that product (and we’ll get to the target market in a few paragraphs) use the same spreadsheet to determine which product yielded the highest commissions. Maybe product ‘X’ averaged around $2000 per close but with only five sold you’re still doing better with ‘Y’, economically speaking. BUT if you just increase the number of leads that would need or desire product ‘X’ you could really start raking it in, right?
Do you see where I’m going with this? Haphazardly, with little or no direct mail – perhaps with referrals only – you’re managing to sell certain products to certain demographics. Of course, in reality, it will be many more than three different products which is why you need to go about this systematically.
However, once you start promoting product ‘Y’ and you start receiving an abundance of leads, DO NOT stop promoting that product just because you now have some more business. Keep on putting out that communication repeatedly and additionally market to the next product to the target market. We’re going for abundance here. When you’ve got an abundance of business, it is much easier to solve whatever problems arise with that than the type of problems that come from having a scarcity of business.
Learning a subject is all about wrapping your wits around the key principles involved and building upon those. Wrap your wits around this and you will be on your way to becoming a marketing expert.
Now that you know which product to start with, you have to know who is going to buy it, which comes to our next step.
Research to find who the audience is that you are going to sell to.
Not all audiences are the same. Take for example the TV show, Showtime at the Apollo. Not everyone would want to watch that. Just like there is a totally different target audience for American Idol. (If you never heard of these, then more than likely you aren’t their audience.) Case in point: you have to determine who your audience is, which is called a “market”. A “market” is a type of audience, a type of user. Figure out everything you can about that particular market that buys your main (what you sell the most of) product. The good thing is that you already have access to all their data – age ranges, credit scores, income, etc. It is time to add this data to your spread sheet.
Product X: Earned 1% Sold 8
Product Y: Earned $900 Sold 20
Product Z: Earned ½% Sold 12
Credit ranges
Age ranges
Income level
Once you have the demographics of the people that buy your “easiest-to-sell” product, you can then buy a list of that particular type of audience. You can go to a list company that you feel good about or have gotten recommendations for, and buy a list of people within those specific criteria. Get a list in a certain zip code or a certain mile radius around your office. (I have found that in more rural areas you will have to do a larger mileage radius than you would have to in a more urban area – it depends on the population.)
The reason you want to do such a thorough job of finding out who you are selling to is that 40% of your marketing campaign’s success (success meaning whether or not you get a good response) is dependent on your list. 40%! That is a big percentage to mess up on at the get-go. Besides, it is your list and the postage that are going to be the most expensive parts of your direct mail campaign. I cannot stress enough the importance of a good list – it makes all the difference in the world.
Here is an excellent case study of a company of mortgage professionals called Priority Financial Services that did exactly what I have been writing about here. They did an exhaustive research of what type of product they should focus on offering and what type of consumer would reach for their services.
Ervin Kowitz and Brian Kowitz are the owners of PFS. Their specialties include "no income qualifier" loans and loans for those without an income. They have a great deal of experience and expertise for those borrowers with credit problems including bankruptcy and foreclosure. With over 12,000 loans closed since 1994, they had quite a history that helped them determine the type of customer that they decided to focus on. Coupling their own internal study with market research and data retrieval from a source of strategic partners, Ervin and Brian were able to focus on a sector of the market whose need was the biggest segment of the growing market and truly specialize in it. This will vary for your particular business or area, but you can ascertain your niche in the same or similar way that they did.
The question they asked themselves was, ‘what was the most valuable asset that their business had’. Contrary to the usual answers of inventory, lease or even employees – even though employees are very high on the list, Ervin and Brian determined that their actual client base was their most valuable asset with their employees running a close 2nd. Once they determined this, they were on the right track to determining their niche.
PFS determined via their client base where their best clients were coming from and also analyzed where they were getting their best return. They saw a tremendous need in their customer base for financing for credit challenged individuals. Being primarily in the sub-prime market, Ervin and Brian further targeted a highly unique sector of the mortgage business – bankruptcies. They had spent 11 years dealing with the ‘ins and outs’ of bankruptcies, so much that 41% of their business was that specialized market. When this was unearthed, they had found their niche.
Niches can be very selective and they can be very broad as Ervin and Brian discovered. Even though they researched and found their niche, every issue they are presented with is unique. Though they offer many different products for their specialized market, they have been able to create a “service” niche. Through their creativity and understanding of the needs of their credit-challenged clients, they have been able to create literally a road map for each individual customer that is specific to them and in their best interest.
Priority Financial Service’s research may be very different than the research you need to do. The important thing is to comb through your files and take a look for the biggest commonalities and find out all you can about that product, market or trend you discover. You will have your own realization and you’ll be able to better define your target market and what particular products you need to concentrate your efforts on. Being everything to all people doesn’t necessarily communicate in marketing. People want to know what you can do for them specifically and when you are able to communicate that to a specific group – bingo! You just hit the jack pot.
In my next article,“Direct Mail Marketing-Can It Really Pay Off -Part Two”, I will teach you how to create copy (text, verbiage) in your promotional material to really get your message across to your target market in order to get a response. In the meantime, you have some homework to do. Happy Hunting!
http://www.articlebin.com/view-Direct_Mail_Marketing_%E2%80%93_Can_it_Really_Pay_Off__Step_1__Researching_Your_Target_Market-59736.html
Debt Consolidation Advice
Debt consolidation can be your ring-buoy in case you are in debt and cannot manage all your loans anymore. Such alternative as a debt consolidation loan is designed in order not only to help individuals unite all their loans in one manageable loan but also gain much lower interest rates, APR (annual percentage rate) and even loan terms. No matter in which stage you decide to benefit from a debt consolidation loan, you should know that sound knowledge of the subject matter is a key to your success, so never grudge your time on reading informative articles and helpful recommendations because they will undoubtedly prove useful to you.
There are several ways of consolidating debts and many reasons for doing this. Reasons can vary depending on situation but consolidation options are the same for everyone. Borrowing money against you home's equity is the first option available for those who aim at debt consolidation. This can be a perfect choice, if the real value of your home and all valuable assets you have in it are stable, so that lenders could be sure that you are not a risky but a paying client. The second option is zero-interest credit cards and bank loans. Credit union loans can also be beneficial if you need to borrow money in order to consolidate your current debts.
Debt consolidation is undoubtedly the best alternative to bankruptcy you can ever find. In case you decided to borrow money and consolidate your debts, you should remember that here is no place for rash decisions, everything should be properly considered. Debt consolidation loans are highly demanded nowadays and there are a lot of available offers in the market, and this is exactly why it is more than simply sensible to shop around for best loan at best price. Before you start analyzing the market and comparing different offers and rates, you should manage you budget and decide upon the amount of interest rates and APRs which you can afford as well as terms which can be beneficial to you. You should calculate everything carefully and make sure that debt consolidation is the best choice for you.
We suggest that you browse the Internet for the best debt consolidation offers and save both your time and your money. Search for trustworthy and reputable lenders, compare interest rates, terms and additional fees charged and choose offers which fit your needs and your budget best. After this you should request quotes from different lenders, fill them out and compare them carefully when you receive them back. It's also advised to use free online calculators which are designed in order to help you calculate estimated interest rates you can have depending, for example on your home's equity, credit history and your income. Right after you choose an appropriate loan which will help you consolidate your debts, you have to make sure that you can trust the company or the lender you plan to deal with.
http://www.articlebin.com/view-Debt_Consolidation_Advice-68991.html
There are several ways of consolidating debts and many reasons for doing this. Reasons can vary depending on situation but consolidation options are the same for everyone. Borrowing money against you home's equity is the first option available for those who aim at debt consolidation. This can be a perfect choice, if the real value of your home and all valuable assets you have in it are stable, so that lenders could be sure that you are not a risky but a paying client. The second option is zero-interest credit cards and bank loans. Credit union loans can also be beneficial if you need to borrow money in order to consolidate your current debts.
Debt consolidation is undoubtedly the best alternative to bankruptcy you can ever find. In case you decided to borrow money and consolidate your debts, you should remember that here is no place for rash decisions, everything should be properly considered. Debt consolidation loans are highly demanded nowadays and there are a lot of available offers in the market, and this is exactly why it is more than simply sensible to shop around for best loan at best price. Before you start analyzing the market and comparing different offers and rates, you should manage you budget and decide upon the amount of interest rates and APRs which you can afford as well as terms which can be beneficial to you. You should calculate everything carefully and make sure that debt consolidation is the best choice for you.
We suggest that you browse the Internet for the best debt consolidation offers and save both your time and your money. Search for trustworthy and reputable lenders, compare interest rates, terms and additional fees charged and choose offers which fit your needs and your budget best. After this you should request quotes from different lenders, fill them out and compare them carefully when you receive them back. It's also advised to use free online calculators which are designed in order to help you calculate estimated interest rates you can have depending, for example on your home's equity, credit history and your income. Right after you choose an appropriate loan which will help you consolidate your debts, you have to make sure that you can trust the company or the lender you plan to deal with.
http://www.articlebin.com/view-Debt_Consolidation_Advice-68991.html
Facts for People with Bad Credit Score
Bad credit is a poor credit rating. People with a bad credit rating have a history of late payments, skipping payments, over borrowing on credit cards or declaring bankruptcy. Poor financial management leads to bad credit. Spending habits, forgetfulness and lack of organization result in a bad credit rating. Then credit reference agencies give you a negative rating whenever you apply for a home loan or a mortgage. Not to worry as you can still get bad credit loans.
What is credit scoring?
This is a statistical method to analyze the applicant’s characteristics. With the help of credit scoring the lender decides on the applicators qualification for credit. Credit rating or credit scores are provided to lenders by credit bureaus. The Federal Trade Commission site on consumer issues gives details of credit scoring. Applicant’s bill-paying history, the number of accounts, types of accounts, age of accounts and amount of outstanding debt determine the scoring. Points are awarded for each factor
• Whether you are likely to repay the debt
• Whether you are likely to make payments on time (payment of credit card bills, utility bills, student loans etc. are checked.)
• Ration of the income to debt is another important factor. In worst cases it is 60:40.
• The length of time one has had credit is also important as it shows how the applicant has handled credit over a longer period of time.
Make sure your report is accurate. Fix Bad Credit Report if it is inaccurate. You could go online to find the various credit reporting agencies that could provide you, your credit report for free.
Bad credit is a poor credit rating. People with a bad credit rating have a history of late payments, skipping payments, over borrowing on credit cards or declaring bankruptcy. Poor financial management leads to bad credit. Spending habits, forgetfulness and lack of organization result in a bad credit rating. Then credit reference agencies give you a negative rating whenever you apply for a home loan or a mortgage. Not to worry as you can still get bad credit loans.
What is credit scoring?
This is a statistical method to analyze the applicant’s characteristics. With the help of credit scoring the lender decides on the applicators qualification for credit. Credit rating or credit scores are provided to lenders by credit bureaus. The Federal Trade Commission site on consumer issues gives details of credit scoring. Applicant’s bill-paying history, the number of accounts, types of accounts, age of accounts and amount of outstanding debt determine the scoring. Points are awarded for each factor
• Whether you are likely to repay the debt
• Whether you are likely to make payments on time (payment of credit card bills, utility bills, student loans etc. are checked.)
• Ration of the income to debt is another important factor. In worst cases it is 60:40.
• The length of time one has had credit is also important as it shows how the applicant has handled credit over a longer period of time.
Make sure your report is accurate. Fix Bad Credit Report if it is inaccurate. You could go online to find the various credit reporting agencies that could provide you, your credit report for free.
Obtaining Credit
A check on the credit of the loan applicant is done by potential lenders before granting mortgages, personal loans, refinancing or other loans. The three agencies that are primarily used are Trans Union, Equifax, and Experian. The lender does not rely only on credit scores to give you the loan but checks three factors Capacity, capital and Character.
Capacity indicates your ability to make payments on time. A steady job, your salary and other payment determine this ability. If you do not have a steady job and a good salary you cannot pay back easily. Also if you are making payments for other loans you may not be able to attain another if you do not have the capacity to pay back.
Capital is the total assets you have in stocks, banks and immovable property. A sale of any of these assets could help you repay the loan in case you are unable to work or your savings dwindles. Applicants with more capital get bigger amounts in loans or mortgages.
Character is determined by the promises you have kept. This is an important factor as all lenders look to receiving their payments at the right time.
An important consideration is the applicants
• Income to debt ratio also determines whether you get the loan. The worst case this can be is 60:40.
• Credit history of bill-payments
• Has the applicant filed for personal bankruptcy at any point of time?
• Credit rating score should be in the mean values, neither too high nor too low.
• Incase of earlier debt they type of debt you have is considered (installment or revolving debt).Revolving debt is applicable by credit card companies.
Many people like to erase bad credit; you could go to credit repair services that are non-profit. Get their help to organize your payments and finance. You could avail a debt consolidation loan and get even on bad credit scores.
A check on the credit of the loan applicant is done by potential lenders before granting mortgages, personal loans, refinancing or other loans. The three agencies that are primarily used are Trans Union, Equifax, and Experian. The lender does not rely only on credit scores to give you the loan but checks three factors Capacity, capital and Character.
Capacity indicates your ability to make payments on time. A steady job, your salary and other payment determine this ability. If you do not have a steady job and a good salary you cannot pay back easily. Also if you are making payments for other loans you may not be able to attain another if you do not have the capacity to pay back.
Capital is the total assets you have in stocks, banks and immovable property. A sale of any of these assets could help you repay the loan in case you are unable to work or your savings dwindles. Applicants with more capital get bigger amounts in loans or mortgages.
Character is determined by the promises you have kept. This is an important factor as all lenders look to receiving their payments at the right time.
An important consideration is the applicants
• Income to debt ratio also determines whether you get the loan. The worst case this can be is 60:40.
• Credit history of bill-payments
• Has the applicant filed for personal bankruptcy at any point of time?
• Credit rating score should be in the mean values, neither too high nor too low.
• Incase of earlier debt they type of debt you have is considered (installment or revolving debt).Revolving debt is applicable by credit card companies.
Many people like to erase bad credit; you could go to credit repair services that are non-profit. Get their help to organize your payments and finance. You could avail a debt consolidation loan and get even on bad credit scores.
http://www.articlebin.com/view-Facts_for_People_with_Bad_Credit_Score-69276.html
What is credit scoring?
This is a statistical method to analyze the applicant’s characteristics. With the help of credit scoring the lender decides on the applicators qualification for credit. Credit rating or credit scores are provided to lenders by credit bureaus. The Federal Trade Commission site on consumer issues gives details of credit scoring. Applicant’s bill-paying history, the number of accounts, types of accounts, age of accounts and amount of outstanding debt determine the scoring. Points are awarded for each factor
• Whether you are likely to repay the debt
• Whether you are likely to make payments on time (payment of credit card bills, utility bills, student loans etc. are checked.)
• Ration of the income to debt is another important factor. In worst cases it is 60:40.
• The length of time one has had credit is also important as it shows how the applicant has handled credit over a longer period of time.
Make sure your report is accurate. Fix Bad Credit Report if it is inaccurate. You could go online to find the various credit reporting agencies that could provide you, your credit report for free.
Bad credit is a poor credit rating. People with a bad credit rating have a history of late payments, skipping payments, over borrowing on credit cards or declaring bankruptcy. Poor financial management leads to bad credit. Spending habits, forgetfulness and lack of organization result in a bad credit rating. Then credit reference agencies give you a negative rating whenever you apply for a home loan or a mortgage. Not to worry as you can still get bad credit loans.
What is credit scoring?
This is a statistical method to analyze the applicant’s characteristics. With the help of credit scoring the lender decides on the applicators qualification for credit. Credit rating or credit scores are provided to lenders by credit bureaus. The Federal Trade Commission site on consumer issues gives details of credit scoring. Applicant’s bill-paying history, the number of accounts, types of accounts, age of accounts and amount of outstanding debt determine the scoring. Points are awarded for each factor
• Whether you are likely to repay the debt
• Whether you are likely to make payments on time (payment of credit card bills, utility bills, student loans etc. are checked.)
• Ration of the income to debt is another important factor. In worst cases it is 60:40.
• The length of time one has had credit is also important as it shows how the applicant has handled credit over a longer period of time.
Make sure your report is accurate. Fix Bad Credit Report if it is inaccurate. You could go online to find the various credit reporting agencies that could provide you, your credit report for free.
Obtaining Credit
A check on the credit of the loan applicant is done by potential lenders before granting mortgages, personal loans, refinancing or other loans. The three agencies that are primarily used are Trans Union, Equifax, and Experian. The lender does not rely only on credit scores to give you the loan but checks three factors Capacity, capital and Character.
Capacity indicates your ability to make payments on time. A steady job, your salary and other payment determine this ability. If you do not have a steady job and a good salary you cannot pay back easily. Also if you are making payments for other loans you may not be able to attain another if you do not have the capacity to pay back.
Capital is the total assets you have in stocks, banks and immovable property. A sale of any of these assets could help you repay the loan in case you are unable to work or your savings dwindles. Applicants with more capital get bigger amounts in loans or mortgages.
Character is determined by the promises you have kept. This is an important factor as all lenders look to receiving their payments at the right time.
An important consideration is the applicants
• Income to debt ratio also determines whether you get the loan. The worst case this can be is 60:40.
• Credit history of bill-payments
• Has the applicant filed for personal bankruptcy at any point of time?
• Credit rating score should be in the mean values, neither too high nor too low.
• Incase of earlier debt they type of debt you have is considered (installment or revolving debt).Revolving debt is applicable by credit card companies.
Many people like to erase bad credit; you could go to credit repair services that are non-profit. Get their help to organize your payments and finance. You could avail a debt consolidation loan and get even on bad credit scores.
A check on the credit of the loan applicant is done by potential lenders before granting mortgages, personal loans, refinancing or other loans. The three agencies that are primarily used are Trans Union, Equifax, and Experian. The lender does not rely only on credit scores to give you the loan but checks three factors Capacity, capital and Character.
Capacity indicates your ability to make payments on time. A steady job, your salary and other payment determine this ability. If you do not have a steady job and a good salary you cannot pay back easily. Also if you are making payments for other loans you may not be able to attain another if you do not have the capacity to pay back.
Capital is the total assets you have in stocks, banks and immovable property. A sale of any of these assets could help you repay the loan in case you are unable to work or your savings dwindles. Applicants with more capital get bigger amounts in loans or mortgages.
Character is determined by the promises you have kept. This is an important factor as all lenders look to receiving their payments at the right time.
An important consideration is the applicants
• Income to debt ratio also determines whether you get the loan. The worst case this can be is 60:40.
• Credit history of bill-payments
• Has the applicant filed for personal bankruptcy at any point of time?
• Credit rating score should be in the mean values, neither too high nor too low.
• Incase of earlier debt they type of debt you have is considered (installment or revolving debt).Revolving debt is applicable by credit card companies.
Many people like to erase bad credit; you could go to credit repair services that are non-profit. Get their help to organize your payments and finance. You could avail a debt consolidation loan and get even on bad credit scores.
http://www.articlebin.com/view-Facts_for_People_with_Bad_Credit_Score-69276.html
Keeping Your Business Out Of Bankruptcy
Business debt is the easiest debt to get into and the most difficult to get out of. Debt consolidation is an easy, effective way of making sure that a business has its cash flow available at a time when it needs it. There are many struggling businesses today that have borrowed large sums of money from lending institutions but have no way to pay them back. This happens either because of unprofitable operations, or because the company has grown more quickly than its operating capital.
Business debt consolidation from debt management firms helps companies in need manage their financial resources better and they are cheaper than CPA's. Debt consolidation seeks to reorganize that debt in a more efficient method that will provide better cash flow for a company.
Consolidation allows the debts of a company to be combined into one sum rather than 20 payments. Using this large sum, debt management firms will act as managers of a client's debt and try to make it easier to pay off that debt.
Debt management firms can be more attractive than the traditional route of filing for Chapter 11 bankruptcy with the government. Filing for Chapter 11 causes an extreme amount of delays as well as costly expenditures. Before the Trustee will help a company with a debt reorganization plan, the company will have to hire professionals for debt consultation first. Time can also go to waste when a company is waiting for the Trustee to approve the plan which can take months to even years for approval. Some companies cannot afford to wait that long.
Business debt consolidation is a whole lot like college loan consolidations are. With college loans, the graduate can hire a professional organization to help him or her to combine his or her loans into a single sum, discovers a low, fixed interest rate, and pay off the debt in consistent amounts month by month, over a long time period. In the long run this helps the student save a great deal of money. The same is true for businesses and debt consolidation.
You can always get more business loans and credit cards but that will have the potential to put you even deeper in debt. It just makes sense that you would not want to make matters worse. Borrowing money can be helpful if you know that your profits will rise indefinitely, however since most business owners really don't know, it is best that you seek to get some help from a credit union instead. It is just good sense. They work with you and not against you the way that a loan can at times.
http://www.articlesbase.com/finance-articles/keeping-your-business-out-of-bankruptcy-18548.html
Business debt consolidation from debt management firms helps companies in need manage their financial resources better and they are cheaper than CPA's. Debt consolidation seeks to reorganize that debt in a more efficient method that will provide better cash flow for a company.
Consolidation allows the debts of a company to be combined into one sum rather than 20 payments. Using this large sum, debt management firms will act as managers of a client's debt and try to make it easier to pay off that debt.
Debt management firms can be more attractive than the traditional route of filing for Chapter 11 bankruptcy with the government. Filing for Chapter 11 causes an extreme amount of delays as well as costly expenditures. Before the Trustee will help a company with a debt reorganization plan, the company will have to hire professionals for debt consultation first. Time can also go to waste when a company is waiting for the Trustee to approve the plan which can take months to even years for approval. Some companies cannot afford to wait that long.
Business debt consolidation is a whole lot like college loan consolidations are. With college loans, the graduate can hire a professional organization to help him or her to combine his or her loans into a single sum, discovers a low, fixed interest rate, and pay off the debt in consistent amounts month by month, over a long time period. In the long run this helps the student save a great deal of money. The same is true for businesses and debt consolidation.
You can always get more business loans and credit cards but that will have the potential to put you even deeper in debt. It just makes sense that you would not want to make matters worse. Borrowing money can be helpful if you know that your profits will rise indefinitely, however since most business owners really don't know, it is best that you seek to get some help from a credit union instead. It is just good sense. They work with you and not against you the way that a loan can at times.
http://www.articlesbase.com/finance-articles/keeping-your-business-out-of-bankruptcy-18548.html
The Difficulty In Medical Bankruptcy
As the world becomes more and more unhealthy, medical bankruptcy becomes more likely as people fight to cure various diseases and ailments associated with their lifestyle. Unforeseen medical bills can also wreak havoc on individuals that are unable to work while they are seriously ill. This may also be the case for individuals who have health insurance. Medical bankruptcy may be treated with a bit more sympathy by some courts, depending on the situation of the individual.
Examples of Groups Filing for Medical Bankruptcy
People who are 65 and over are more likely to suffer from medical bankruptcy than younger and healthier age groups. It goes without saying that the body becomes more prone to illness the older that we get. This makes it inevitable that as we get older and can longer work to pay the bills, we may be faced with medical bankruptcy in the case of a serious illness, if we have not taken preventative measures prior to the diagnosis.
Another group which is likely to file for medical bankruptcy is that of young single mothers. If their spouses have abandoned them and their children, and do not pay any child support, the mother will be left to pay these high expenses by herself. It is a difficult situation for any parent who has a sick child to care for, and if it is the parent who is sick herself then there will be no one to earn the money to pay the bills.
Low wage earners are another group that may find themselves filing for medical bankruptcy. At times it may be difficult to find jobs that can support all of a family's needs, so finding the money for unexpected medical bills can be a nearly impossible task for this group. Poor education and lack of practical skills can be attributing factors to this problem, and will require further investigation when the time arises.
Some people will file for medical bankruptcy simply because the medical systems are not willing to work out any payment schedules for them to repay their debts. Cases such as these have risen steadily over the years, and are now quite a common occurrence in bankruptcy courts around the country. Since many folks do not have large amounts of money readily available to pay mounting hospital costs, the only choice for some is to declare medical bankruptcy.
If you fall into any of these categories, you may find the claiming medical bankruptcy is the best choice for you to get out from under the weight of your bills. This bankruptcy is normally seen in a more sympathetic light than others by the courts and lenders, since the circumstances are generally unforeseen and unavoidable.
http://www.articlesbase.com/finance-articles/the-difficulty-in-medical-bankruptcy-178302.html
Examples of Groups Filing for Medical Bankruptcy
People who are 65 and over are more likely to suffer from medical bankruptcy than younger and healthier age groups. It goes without saying that the body becomes more prone to illness the older that we get. This makes it inevitable that as we get older and can longer work to pay the bills, we may be faced with medical bankruptcy in the case of a serious illness, if we have not taken preventative measures prior to the diagnosis.
Another group which is likely to file for medical bankruptcy is that of young single mothers. If their spouses have abandoned them and their children, and do not pay any child support, the mother will be left to pay these high expenses by herself. It is a difficult situation for any parent who has a sick child to care for, and if it is the parent who is sick herself then there will be no one to earn the money to pay the bills.
Low wage earners are another group that may find themselves filing for medical bankruptcy. At times it may be difficult to find jobs that can support all of a family's needs, so finding the money for unexpected medical bills can be a nearly impossible task for this group. Poor education and lack of practical skills can be attributing factors to this problem, and will require further investigation when the time arises.
Some people will file for medical bankruptcy simply because the medical systems are not willing to work out any payment schedules for them to repay their debts. Cases such as these have risen steadily over the years, and are now quite a common occurrence in bankruptcy courts around the country. Since many folks do not have large amounts of money readily available to pay mounting hospital costs, the only choice for some is to declare medical bankruptcy.
If you fall into any of these categories, you may find the claiming medical bankruptcy is the best choice for you to get out from under the weight of your bills. This bankruptcy is normally seen in a more sympathetic light than others by the courts and lenders, since the circumstances are generally unforeseen and unavoidable.
http://www.articlesbase.com/finance-articles/the-difficulty-in-medical-bankruptcy-178302.html
Debt Settlement: Debt Relief for the Elderly and the Disabled
Note: this is not to be considered legal advice, and it is dealing with the hypothetical “average” elderly and/or disabled person. Each case is unique and to determine the legal ramifications of your individual scenario you should consult an attorney.)
Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 30 months. In order to accomplish these savings, however, a client must voluntarily stop paying their creditors. By doing this, a creditor is forced to confront the following question: How can I collect the most money from this past due debtor with the least amount of effort and the least total expense to my company? Typically the answer to this question in the minds’ of creditors is accepting a lump sum settlement for less than the full balance owed.
Although the vast majority of cases work out according to this framework, as anyone who has ever read a debt negotiation contract can tell you---it’s impossible for a debt settlement company to guarantee that a client won’t be the target of any legal action by their creditors. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.
That being said, thanks to highly favorable state and federal debtor laws, the elderly and the disabled are very difficult to collect a past due debt from relative to the average American consumer, even if a creditor has sued them in court and won a judgment.
Consider the following situation. Let’s say a creditor has just sued you and won a judgment in court. They now have to execute the judgment in order to actually start collecting the debt. One way a creditor executes a judgment is through wage garnishment. When a creditor garnishes someone’s wages, they automatically (and legally) withdraw a certain percentage of that person’s wages every paycheck (25% after taxes in most states) until the debt is paid off. Fortunately, creditors cannot garnish Social Security, disability, and most pensions (unless the “creditor” is the mother of your children and she’s collecting alimony). This being the case, the creditor would probably look for another way to collect the debt. Levying a bank account is another common method for executing a judgment. Again the elderly and the disabled are protected, presuming the bank account’s funds are made up of the deposits from social security, pension, and/or disability benefits.
A creditor is always reserved the right to pursue legal action to collect a past due debt, even if the debtor is elderly or disabled. However, it only makes sense that they’d prefer to accept a settlement for less than the balance, especially if the debtor has no assets or lives in a debtor-friendly state like Texas, Florida, Iowa, Pennsylvania, Arkansas, or Oklahoma. It is for these reasons that credit card debt reduction makes a lot of sense for the elderly and the disabled who are struggling to pay their minimum payments each month.
http://www.articlesbase.com/finance-articles/debt-settlement-debt-relief-for-the-elderly-and-the-disabled-83013.html
Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 30 months. In order to accomplish these savings, however, a client must voluntarily stop paying their creditors. By doing this, a creditor is forced to confront the following question: How can I collect the most money from this past due debtor with the least amount of effort and the least total expense to my company? Typically the answer to this question in the minds’ of creditors is accepting a lump sum settlement for less than the full balance owed.
Although the vast majority of cases work out according to this framework, as anyone who has ever read a debt negotiation contract can tell you---it’s impossible for a debt settlement company to guarantee that a client won’t be the target of any legal action by their creditors. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.
That being said, thanks to highly favorable state and federal debtor laws, the elderly and the disabled are very difficult to collect a past due debt from relative to the average American consumer, even if a creditor has sued them in court and won a judgment.
Consider the following situation. Let’s say a creditor has just sued you and won a judgment in court. They now have to execute the judgment in order to actually start collecting the debt. One way a creditor executes a judgment is through wage garnishment. When a creditor garnishes someone’s wages, they automatically (and legally) withdraw a certain percentage of that person’s wages every paycheck (25% after taxes in most states) until the debt is paid off. Fortunately, creditors cannot garnish Social Security, disability, and most pensions (unless the “creditor” is the mother of your children and she’s collecting alimony). This being the case, the creditor would probably look for another way to collect the debt. Levying a bank account is another common method for executing a judgment. Again the elderly and the disabled are protected, presuming the bank account’s funds are made up of the deposits from social security, pension, and/or disability benefits.
A creditor is always reserved the right to pursue legal action to collect a past due debt, even if the debtor is elderly or disabled. However, it only makes sense that they’d prefer to accept a settlement for less than the balance, especially if the debtor has no assets or lives in a debtor-friendly state like Texas, Florida, Iowa, Pennsylvania, Arkansas, or Oklahoma. It is for these reasons that credit card debt reduction makes a lot of sense for the elderly and the disabled who are struggling to pay their minimum payments each month.
http://www.articlesbase.com/finance-articles/debt-settlement-debt-relief-for-the-elderly-and-the-disabled-83013.html
Bitten By Bankruptcy?
Research at The Debt Line has shown that up to 1 million people are on the verge of declaring themselves bankrupt as they struggle to cope with thousands of pounds worth of debt.
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order.
Bankruptcy is the most drastic method available for dealing with debts you cannot pay. It can however set you free from overwhelming debts so you can make a fresh start, and makes sure your assets are shared out fairly amongst your creditors. However there are many implications of bankruptcy. During your bankruptcy you will be subject to several restrictions, which can be avoided through an alternative to bankruptcy such as an IVA. Anyone can go bankrupt, and there are different insolvency procedures for dealing with companies and for individuals who become bankrupt.
Applying for an IVA is a regularly looked at as an avoidance from bankruptcy. The IVA enables you to cut your debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards your debt than could otherwise be expected were you to be made bankrupt. You can even take out a fresh mortgage while in an IVA. What's more, it is a totally private arrangement - nobody needs to know about it apart from you, your advisors and your creditors. An IVA ensures that your home is protected and your job is not at risk and with The Debt Line an IVA can write off up to 75% of your debts.
There are so many advantages of an IVA. For example, there is not the stigma or the publicity that normally accompanies bankruptcy and the debtor can continue to trade in a business to generate money. It can give the peace of mind to have a fresh financial start.
The implications of bankruptcy are simple. Some of these disadvantages are: loosing control of your assets, not being able to act as a company director (if you wish to do so), being publicly examined in court and your credit being affected for many years after the annulment. It seems that as far as The Debt Line are concerned, the bankruptcy route could be very much avoided.
One in 8 of those with five-figure debts say they are 'quite likely' or 'very likely' to declare themselves bankrupt. Also, with an interest rate rise looking more and more definite, these figures are expected to grow. With the help of The Debt Line a growing number of people will be finding alternative ways to get themselves out of debt.
http://www.articlesbase.com/debt-consolidation-articles/bitten-by-bankruptcy-46568.html
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order.
Bankruptcy is the most drastic method available for dealing with debts you cannot pay. It can however set you free from overwhelming debts so you can make a fresh start, and makes sure your assets are shared out fairly amongst your creditors. However there are many implications of bankruptcy. During your bankruptcy you will be subject to several restrictions, which can be avoided through an alternative to bankruptcy such as an IVA. Anyone can go bankrupt, and there are different insolvency procedures for dealing with companies and for individuals who become bankrupt.
Applying for an IVA is a regularly looked at as an avoidance from bankruptcy. The IVA enables you to cut your debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards your debt than could otherwise be expected were you to be made bankrupt. You can even take out a fresh mortgage while in an IVA. What's more, it is a totally private arrangement - nobody needs to know about it apart from you, your advisors and your creditors. An IVA ensures that your home is protected and your job is not at risk and with The Debt Line an IVA can write off up to 75% of your debts.
There are so many advantages of an IVA. For example, there is not the stigma or the publicity that normally accompanies bankruptcy and the debtor can continue to trade in a business to generate money. It can give the peace of mind to have a fresh financial start.
The implications of bankruptcy are simple. Some of these disadvantages are: loosing control of your assets, not being able to act as a company director (if you wish to do so), being publicly examined in court and your credit being affected for many years after the annulment. It seems that as far as The Debt Line are concerned, the bankruptcy route could be very much avoided.
One in 8 of those with five-figure debts say they are 'quite likely' or 'very likely' to declare themselves bankrupt. Also, with an interest rate rise looking more and more definite, these figures are expected to grow. With the help of The Debt Line a growing number of people will be finding alternative ways to get themselves out of debt.
http://www.articlesbase.com/debt-consolidation-articles/bitten-by-bankruptcy-46568.html
Smart Debt Recovery With Alternatives to Bankruptcy!
Bankruptcy is a legally declared inability to pay back all your lenders. One can seek out for a creditor in filing bankruptcy, in order to recoup a portion of what you owe. It is carried out by a bankruptcy attorney in a legal manner. Basically gives a borrower indebted, a new lease of life. As it helps relieve the debtor off his pending debts and enables him to repay the creditor systematically, he only pays what he can afford to pay.
Basic purpose of filing bankruptcy:
Gives a new lease of life to all those debtors trapped badly in debts
Stops creditors from taking any legal action against debtors
Relieves the debtor off his debts
Repay only what you can afford
Repay in a systematic manner
Commonly personal bankruptcy is of two kinds:
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy is when you discharge all your debts with the help of a court. To discharge all your debts you will in turn give up your property. It can also include items that are already paid off. However, not all debts can be discharged under this.
Chapter 13 Bankruptcy helps you to get rid of debt by obtaining a court approved plan to repay back. It is usually stretched over 3-5 year period and lets you pay back your debts in an orderly manner. You get to keep your personal property and pay only what you can afford to pay till that date. So your creditor generally accepts less than the whole amount.
Unfortunately, filing bankruptcy can cause adverse credit problems for roughly around 7-10 years. It will also reflect badly on your credit history and is not favourable in terms
of credit worthiness. After bankruptcy, you might be doing exceptionally well on your financial front, but you will still face problems. Every time you apply for a personal loan or home loan you will either be denied of loans or are subjected to unusually high rate of interest.
Consider bankruptcy alternatives:
Debt consolidation
Seek help to consolidate or pool together your existing debts into one single new loan, with a lower monthly repayment. The payments being lower for two main reasons:
(a) The loan is spread over a longer period of time than your existing debts
(b) The interest rate being charged is less than the average rate on your current debts.
Whilst this is not the answer for many people, it can be a useful tool during a period of low interest rates, or when there is sufficient equity built up in a property so that a second mortgage or remortgage can be arranged.
IVA
A true alternative to using a debt consolidation and bankruptcy is IVA. IVA helps you to make an agreement between you and your creditor, wherein you agree to pay back a certain amount of your loan within a period of 60 months or so, beyond which your debts are written off. Your IVA can be arranged only by an insolvency practitioner to get you out of unsecured debts of £15,000 or more.
In addition to this, your interest charges and court proceedings will stop. You wipe off up to 80% of your debts.
Bankruptcy is the last option to be considered. But once you are declared bankrupt you are likely to be trapped in it for many years. The long-term ramifications of which include being unable to access credit, be in certain types of business or open a bank current account.
http://www.articlesbase.com/loans-articles/smart-debt-recovery-with-alternatives-to-bankruptcy-90872.html
Basic purpose of filing bankruptcy:
Gives a new lease of life to all those debtors trapped badly in debts
Stops creditors from taking any legal action against debtors
Relieves the debtor off his debts
Repay only what you can afford
Repay in a systematic manner
Commonly personal bankruptcy is of two kinds:
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy is when you discharge all your debts with the help of a court. To discharge all your debts you will in turn give up your property. It can also include items that are already paid off. However, not all debts can be discharged under this.
Chapter 13 Bankruptcy helps you to get rid of debt by obtaining a court approved plan to repay back. It is usually stretched over 3-5 year period and lets you pay back your debts in an orderly manner. You get to keep your personal property and pay only what you can afford to pay till that date. So your creditor generally accepts less than the whole amount.
Unfortunately, filing bankruptcy can cause adverse credit problems for roughly around 7-10 years. It will also reflect badly on your credit history and is not favourable in terms
of credit worthiness. After bankruptcy, you might be doing exceptionally well on your financial front, but you will still face problems. Every time you apply for a personal loan or home loan you will either be denied of loans or are subjected to unusually high rate of interest.
Consider bankruptcy alternatives:
Debt consolidation
Seek help to consolidate or pool together your existing debts into one single new loan, with a lower monthly repayment. The payments being lower for two main reasons:
(a) The loan is spread over a longer period of time than your existing debts
(b) The interest rate being charged is less than the average rate on your current debts.
Whilst this is not the answer for many people, it can be a useful tool during a period of low interest rates, or when there is sufficient equity built up in a property so that a second mortgage or remortgage can be arranged.
IVA
A true alternative to using a debt consolidation and bankruptcy is IVA. IVA helps you to make an agreement between you and your creditor, wherein you agree to pay back a certain amount of your loan within a period of 60 months or so, beyond which your debts are written off. Your IVA can be arranged only by an insolvency practitioner to get you out of unsecured debts of £15,000 or more.
In addition to this, your interest charges and court proceedings will stop. You wipe off up to 80% of your debts.
Bankruptcy is the last option to be considered. But once you are declared bankrupt you are likely to be trapped in it for many years. The long-term ramifications of which include being unable to access credit, be in certain types of business or open a bank current account.
http://www.articlesbase.com/loans-articles/smart-debt-recovery-with-alternatives-to-bankruptcy-90872.html
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