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Try To Stay Away From Bad Debt And Bankruptcy

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Bad debt is an amount, where business suffers loss and that loss is counted as an expense, as the amount can’t be recollect by the owner. If the debtor declares bankruptcy, problems like bad debt arise. Bad debt is also known by money; therefore it is counted in expense. To account for bad debts, there are two types. They are allowance method and direct write off method. In allowance method, there is a rough idea made at the end of the year for the account of bad debt. It is done, so that they can decrease receivable amount. Many companies make bad debt allowance, as all debtors may pay in full. Money which you cant collect is called as debtor. It mainly arises, if the service or product is given on credit. If customers makes delay payment and later refuses to pay, than its understood that its a bad debt. Bankruptcy means the business which is not able to pay debts.

The process of bankruptcy starts as the petition is filed on creditor’s behalf or by the debtor’s. To recover the debt portion, all assets of debtor is evaluated. As the process of bankruptcy completes, debtors get a sigh of relief. Not to do bankruptcy fraud, as it is a crime. Strategic bankruptcy is different from fraud bankruptcy and is not a criminal act, as it can work against filer. Bankruptcy can disclose all the assets of the debtor. If petition is filed for bankruptcy, creditors can decide debtors assets value. In 1874, India came up with individual bankruptcy law, but still couldn’t got law on corporate bankruptcy. In U.K bankruptcy law got changed, where if debtors facing bankruptcy has to give all occupational pensions. The origin of bankruptcy law came up first through England, but is now known more in U.S. Bankruptcy can sometime lead to death, as there is loads of tension on debtor’s head. Always try not to follow in such cases. You can gather more details regarding bad debts and bankruptcy by visiting various web sites and different sites.

Dealing with Scam Artist Pretending To Be IRS Debt Collectors

Debt blogger

In 2004, the IRS was given the authority to use third party debt collectors to hunt down taxes owed by delinquent taxpayers. Scam artists knew an opportunity when they saw one.

Dealing with Scam Artist Pretending To Be IRS Debt Collectors

In an effort to track down delinquent taxpayers, the federal government gave the IRS the right to hire private debt collectors in 2004. You know, those annoying people that call during dinner. The reason for this change in policy actually made some sense. With as much information as the IRS is forced to deal with, it simply took forever for the IRS to start collection actions. By using the third parties, the IRS would be able to get the process moving without taking up employee time.

As you might imagine, the private tax debt collector program sounded like a good idea, but proved to be problematic. There were two primary problems. First, the legitimate debt collectors were threatening taxpayers. Second, scam artists started posing as debt collectors to collect money from nave tax collectors or perform identify theft on them. It is this second problem that we focus on here.

The central problem with the new debt collector program is how does a taxpayer know if they are dealing with a legitimate company or a scam artist trying to rip them off? Well, the IRS has instituted a new program in an effort to clarify matters. Here are the highlights:

1. If the IRS is going to use a private debt collector to come after you, the agency will first send you a letter indicating as much. The name of the company handling the debt collection will be included in the letter. If you do not receive this letter, ignore or report any parties claiming to be debt collectors to the IRS immediately. Play along and get their contact information so the IRS can hammer them.

2. When dealing with the debt collector, you will eventually reach a point where you write a check. The check should be written to the United States Treasury. If the debt collector instructs you to write it to any other name, they are scam artists and you should report them immediately. There is no exception to this rule. All payments are made to the United States Treasury, just like if you had actually paid your taxes on time!

Scam artists are very creative when it comes to thinking up schemes for ripping people off. Understand and stick to the following guidelines and you can foil them.

Richard A. Chapo is with BusinessTaxRecovery.com – providing information on taxes.

Can Bankruptcy Chapter 13 Score Over A Debt Consolidation Program

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Basically, a debt consolidation program allows a debtor to combine the total outstanding balances through a single payment method. Instead of making numerous and multiple payments on the credit card debts, one is able to make a single and low interest payment. This system may also help the debtor to organize the debts and to increase the credit score more conveniently. While there are numerous consumers who consider the debt consolidation method as a one stop solution to their debt problems; there are others who feel that, a debt consolidation program does not get to the essence of debts. However, there can be several occasions when a debtor might not qualify for a debt consolidation program; those who do not can think of the bankruptcy option particularly Chapter 13. Even by filing Chapter 13, one is able to consolidate huge debts, but the procedure may differ from the one that is used in a debt consolidation program. Let us study the differences and the benefits of both the processes:

Basically, Chapter 13 is a type of debt consolidation; since it is backed by a Federal Bankruptcy Code, a debtor can expect to get better advantages in this procedure.
As soon as Chapter 13 is filed, an automatic stay comes into effect. It is almost like a court based instruction which will prevent most of the debt collection efforts against the debtor. On the other hand, a debt consolidation method is not as powerful. Chapter 13 will stop such actions as a wage garnishment or a foreclosure which is forced on the debtor by the creditors.
While Chapter 13 allows each one of the debts to be combined into a monthly payment e.g. taxes, child support, car payments and mortgage. However, a debt consolidation program will allow the debtor to consolidate specific debts.
In a debt consolidation program, the creditors can only consider lowering the interest and reducing the balances; but in Chapter 13, if certain qualifications are met, a debtor can eliminate up to 90% of the debts. As a result of the reduction in the principal amount, the debts can be eliminated more quickly in chapter 13.
As far as Chapter 13 is concerned, a debtor will be obligated by court to represent the case in the best interest of the debtor; unlike debt consolidation, which is a privately run method, Chapter 13 is backed by legal requirements.
Chapter 13 is also convenient as it tackles the significant debts at first; but a debt consolidation company can penalize the debtors for delaying the unsecured debts.

Therefore Chapter 13 can be considered to be a better option than a debt consolidation program; however, there is a marked difference between the two, and the debtors should understand both the options before getting on with their debt issues.

Debt Help Is Easy To Get

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Debt help is easy to get. Even if one doesn’t have a good credit standing, it’s possible to get debt help. Debt help is available in the form of secured and unsecured personal loans and loans for the businesses. There are loans, which are also available against your paycheck, and these are called payday loans. However payday loans can carry an interest charge, which is as high as 25%. On a compounding basis it’s essential that they be repaid back in time. Otherwise you may have to back more than the loan amount.

There are many non – profit organizations that provide loans for those in need at lower interest rates. You can structure a loan repayment structure whereby the debt can be easily paid of. Therefore they will find out how much debt you have at the moment. What are your streams of revenues and the monthly living expenses that you may have. After this they will structure a plan where you can pay the monthly interest payments easily. Thus it makes sense to make use of these non-profit organizations in times of need.

These organizations are present in all counties. One can easily approach them through the Internet, phones and fax. You can also get information about them at your local city or county council. In many cases banks themselves will tell you to approach them, when they think that they can’t help you to get out of debt. It’s important that you check out the credentials of the company before you approach them for debt help. In fact there are companies, which may steal your identity (this is called identity theft) and can land you in further debt trap. So steer clear of these fly by night companies.

Hence ask around for references and only after you have made a thorough check, approach them for debt help.

Finding Smart Debt Relief Programs

Debt blogger

Several people that are sinking in debt are not aware of effective debt relief programs. There are plenty of misconceptions about debt and how to eliminate it. Over the years, most of the advice has been produced by the creditors themselves, hoping to getting the upper hand with people indebted to them. Many of their assertions lead consumers into forking out more interest and charges, for the most productive part of their lives.

In actual fact, there are some debt relief programs available to get rid of your debt fast, clear away the stress and give you back a normal life.

There are lots of programs for debt relief. However, debt settlement and debt consolidation loans are generally the most utilized approaches. A lot of people also contemplate bankruptcy to help eliminate debt, however, thanks to stringent guidelines, to be eligible can be difficult.

Debt settlement is a remedy for every debt predicament, and has swiftly become the top choice for consumers with financial hardships. The reason is, there are several advantages of debt settlement.

The debts are repaid in a few months, depending on cash availability
Consumers can request the negative trade line on a credit report to be removed, once the debts are settled
Debt settlement typically lowers the debt to earnings ratio quickly, making new credit available
Consumers are able to build new credit and enjoy positive credit ratings, while paying off the debt. This option is unavailable if you go with Bankruptcy or Debt Consolidation, because opening new credit is not permitted while in those programs.

There are still many people who choose debt consolidation. Characteristically, with debt consolidation you exchange multiple debts for a single large debt. Consumers consolidate all of the balances into one loan package. Consumers are offered low monthly payments but the rate of interest is often exhorbitant. In addition there are promises and clauses that consumers consent to so that if they renege, the entire agreement will be in jeopardy.

Choosing the Best Debt Relief Programs

Opting for one debt relief program over the other depends upon cash availability. Debt settlement can be frequently split up into several payments, thus clearing away the debt quickly. Debt consolidation loans will most likely have the repayment conditions based on 2 to 4 years or more, depending on the amount to be paid. This is one reason debt negotiation is becoming so popular; you can negotiate a settlement and repay the debt within months.

Don’t get distracted. To end up being debt-free you must watch each and every penny. It adds up quickly and before you know it, you’ve saved enough to be back on track and your credit rating will reflect this. Finally, choose wisely when scouting for debt relief programs to ensure you are truly benefiting from the plan.