Debtor extinction is a legal process that cancels a debtor’s debt and releases them from further financial obligations. The process and terms vary by country and jurisdiction. The release relieves the debtor of financial responsibility and eliminates creditor rights. Courts require debtors to follow financial instructions during proceedings until they are satisfied, and a release […]
Debt bondage is a form of unfree labor where workers are enslaved by employers through the use of debt. It is prevalent worldwide and can be difficult for victims to break free. It is linked to human trafficking and can also be related to sexual slavery. Dealing with debt bondage is complicated and can be […]
Deficit and debt are different financial terms. Deficit is the negative difference between expenditure and revenue, while debt is the total amount owed since the inception of an organization. Governments finance spending despite a deficit by borrowing money from citizens, programs, and foreign lenders. The debt and deficit management process is a major concern of […]
A debt management plan helps pay off unsecured debts with lower payments to creditors. Unsecured debts include personal loans, bank overdraft fees, and credit cards. Only unsecured debts are eligible, and debtors must pay a monthly fee to the management company. It’s important to choose a reputable company and monitor payments. A debt management plan […]
Margin accounts allow brokerage firms to lend money to clients to purchase securities, with the market value of the securities serving as collateral. Margin debt is the difference between the market value of the collateral and the loan balance. The maximum percentage of securities that can be purchased on credit is set by the Federal […]
Margin accounts allow stock brokerage firms to lend money to clients for purchasing securities, with the market value of the securities serving as collateral. Margin debt is the difference between the market value of the collateral and the loan balance. The maximum percentage of securities that can be purchased on credit is set by the […]
The debt collection statute of limitations sets a time limit for creditors to seek a judgment on an outstanding balance. The length of time depends on individual contractual agreements and government law. Certain debts, such as government debts, are not included in the statute of limitations. Creditors may still attempt to collect after the statute […]
Debtor management involves designing and monitoring policies for extending credit to customers, evaluating creditworthiness, monitoring credit usage, and adjusting credit limits based on economic conditions. The goal is to minimize bad debt and protect the creditor’s interests. Debtor management is a strategy that involves the process of designing and monitoring the policies that govern how […]
Current portion of long-term debt is the amount of long-term debt obligations that must be paid off within the next twelve-month period, and is an ongoing process that is often updated monthly. It is important to maintain this accounting process to compare the long-term debt with current cash and cash equivalents, and to avoid damaging […]
Choosing debt collection software requires consideration of business needs, user skill level, monitoring and reporting functions, technical support, and price. Hosted systems may be a good option for small businesses without IT staff. Price should not be the first consideration. Whether part of an accounts receivable office or in the center of a debt collection […]
Long-term financing is used to acquire assets that will remain serviceable for over a year, allowing businesses to reap direct benefits from the purchase over an extended period. Companies can finance long-term debt through bond issues or loans, with the goal of arranging repayment once the project generates revenue. The idea is to secure a […]
Convertible debt is a type of financing where the outstanding balance can be converted into another form of security or asset. It can be used for mortgages, corporate guarantees, and securities, and provides additional security and options in case of default. Investors should carefully consider the terms before entering into any agreement. Convertible debt is […]
Choose a debt management consultant carefully by avoiding random picks from the internet or phone book. Seek personal referrals, arrange face-to-face meetings or phone calls, and look for a professional with a good track record. Ensure fees are incremental and progress is made towards debt elimination. The first and perhaps the most difficult step in […]
Debt cancellation is when a creditor cancels a debt owed by a debtor, either in part or in full, due to certain circumstances. This can be done through a debt cancellation contract, and can benefit both parties. It can also be used in situations between companies or nations. Debt cancellation is a process that involves […]
Bankruptcy is a last resort for businesses seeking debt relief. Debt restructuring, refinancing, and debt consolidation are other options, but economic conditions and creditor cooperation can limit them. Debt consolidation can be viable if interest rates are lower, and credit counseling firms can negotiate terms. Secured consolidation loans offer the best rates but require collateral. […]
Debt leverage is a strategy of balancing debt and investment returns, often used in real estate purchases. By using a portion of their own funds and financing the rest with a mortgage, the borrower can accumulate equity and potentially profit from the property’s sale. This strategy can also be used for buying equity, but market […]
Debt securities are contracts representing money owed to another party, including bonds, debentures, and paper money. They are important for financing goods and services and can be traded for economic value. Governments, corporations, and private entities issue debt securities, which guarantee repayment with interest after a certain period of time. Currency issued by a federal […]
An allowance for bad debts is used to reduce accounts receivable by the number of accounts unlikely to be collected, providing a more accurate financial picture. Companies must be consistent in calculating this figure to maintain financial statement integrity. Writing off bad debt allows companies to claim an expense and reduce tax liability. Underestimating this […]
The long-term debt ratio measures a company’s debt compared to its assets or equity, indicating its financial health and risk in a downturn. There are two interpretations, comparing debt to assets or shareholder equity. Credit lines can limit its utility, and long-term creditors are more interested in it than short-term creditors. The long-term debt ratio […]
Government debt consolidation loans are available for students with multiple government-backed loans, without a credit check or job requirement. Payment history is critical, and timing may be important. Private loans are unlikely to qualify. To qualify for a government debt consolidation loan, you’ll generally need to meet the criteria of the loan program in question. […]
