Small Business Debt Collection

Debt collection is important for all businesses, but it is much more important for small businesses.  A large business or corporation can better weather the ups and downs of economic cycles, because they have more financing options.  A small business on the other hand may not have as many options and one bad debt can send the company into bankruptcy.

It is extremely important that small businesses have an action plan for debt collection.  Without a written out plan, you are gambling with your business and its ability to stay out of bankruptcy.  Many businesses could have foregone bankruptcy during the financial crisis with a proper plan of action.

How do you decide what is the proper plan of action for collecting your old accounts receivables?  When is the time to start collecting and stop extending the terms?  This can depend on what type of business you have, but a general rule of thumb is the earlier you start, the better your chances of collecting the debt.  Take a look at the chart below to see the chances of collecting versus the age of the debt.

As you can see, the earlier you are to act, the better your chances for collecting the account.  The crucial time for debt collection is at 90 days past due.  The percentages drop by almost 25% and the debt becomes very hard to collect.

You should do all you can as a company to collect the debt before the 90 day mark, but make sure to turn the debt over for collections before the 90 day mark.  This will allow the collection agency to do their research and act on the debt before it gets to the 6 month time period.  It is very difficult to collect a debt if it goes past 6 months.  Most collection agencies will not waste their time with a debt this old.  It is hard for a collection agency to stay in business, because the odds of collecting are so low.

I wish you well in your small business affairs and I hope that you are able to collect all of your bad debts.  If there is one thing that you take from this article, make sure you act sooner than later, your business success might depend on it.

Debt Is Economic Slavery

To be in debt and unable to find a way out is a recipe for panic and the disaster that drives victims to do crazy things. With unpaid bills, threats of legal proceedings and even loss of one’s home, and so on, the scene is set for disaster. It’s a severe crisis and ridding of the chains that dragged one into the mess is as complicated and difficult as almost anything faced in life.

This condition of modern life is slavery to a system designed to inflict through fear. The latter emotion drives panic and other things such as anti-social behaviour and criminality.

Common sense and logic are hard to find when the brain is focused on consequences of debt. Experts are usually required to solve the problem but they are hard to find and usually out-of-reach for the debtor. They do not exist in governments or religion because there are few if any who genuinely know the solution to such problems.

Greed, under-payment for work, addictions, and gambling problems are all part of the mix. Add to it the break-down of relationships, medical and other expenses, as well as family problems and the like all add up to debt that cannot be met.

Both society and the establishment work towards creating the situation and one has to take a look at the big picture to discover how and why it is so.

My memory of reincarnation and strong link to the Spirit of the Universe has provided insight into such situations. Everything is part of a grand plan to bring the world as we know it to an end. The bible tells us that everyone who has lived is back in bodies at this time and they ae judged according to their spirituality.

This explanation will be over the heads of many readers who cannot come to grips with the fact that they are being spiritually killed by the fiction they believe in. All debt is fiction just as religion and the false gods it promotes. Money is one of those fake idols.

When the Spirit took me away from the world in the sense that my need for money faded away It also provided answers that are impossible to find otherwise. It took me to the beginning of religious systems and how man’s passion for make-believe led to the establishment that drives debt.

Fear and loss of common sense is at the heart of driving people into believing in the false gods that are now killing thousands daily. Brain-washing from birth impacts the brain and denies spiritual food that would otherwise lead one out of debt and into a form of recovery that is impossible to find otherwise. Economic slavery is the make-believe that creates power and control of the masses and debt is the trap to keep them in line.

Reasons Why Shouldn’t Use A Personal Loan To Pay Off Your Credit Card Debt

Many people in Singapore hold multiple credit cards at the same time as each card has its own unique benefits. Under such circumstances, people can potentially fall into a debt trap as he/she owes money to several creditors. There are multiple payments and due dates to keep track of, and the non-stop reminders about unsettled balance only adds to the tension. As you fall behind the due dates of making the payments, your debts will only become larger. One of the way out from this debt trap is having a personal loan known as Debt Management Plan or DCP.

DCP was introduced by Association of Banks in Singapore (ABS) in the early part of 2017 for all Singapore nationals and Permanent Residents who are facing difficulty in settling their debts. DCP is a type of personal loan where you can borrow a lump sum amount to pay off all your current debts right away. However, you can take the help of a DCP only for unsecured credit facilities such as personal loans, credit cards and other credit lines. Let us take a look at some of the benefits and drawbacks of a Debt Settlement Plan:

Benefits

  • You only have to make a single payment per month as a DCP consolidates all your debts into a single debt. This will help you save your energy and time and cutting the stress of missing a payment, as you no longer have to keep track of all the different creditors.
  • Lower interest rates with a DCP makes it easier to pay off all your debts and actually make visible progress.
  • When a DCP is managed well, you have a better chance of saving some money instead of spending your whole monthly earnings on paying bills.

Drawbacks

  • The biggest drawback of DCP is the potential of getting into more debt. People who are not careful about their expenses and have a habit of gambling are prone to get themselves further into debt.
  • Even with low interest rates, you may take longer to pay back your debt with DCP. In the long run, this will lead to more interest payment. To avoid this, you must concentrate on paying off your debt as early as possible.
  • If you fail to make timely payments, fines and interests will be imposed, which will only enhance your burdens.

If you choose to transfer your DCP to other banks, you will have to do it three months after your DCP is sanctioned. You will be subject to penalty fees which the original bank may charge for early termination or transferring your DCP. Since a long commitment is required with a DCP, you should do your research extensively before applying for a plan.

Once you have taken a Debt Settlement Plan, all your prevailing credit cards and unsecured debts are adjourned. You will be offered a revolving credit equivalent to your one month’s salary. You will not be eligible to apply for any new unsecured cards during the time your DCP is active, unless you have repaid a part of your debt.

Eligibility criteria

To be eligible for a DCP, you must be a Singaporean or a Permanent Resident. You must have personal assets worth less than S$2 million or your earnings should be in the range of S$20,000 and S$120,000 a year. Your consolidated unsecured debts must exceed by over 12 times your monthly income.

Fees associated with a Debt Management Plan

There are a few banks in Singapore that charge a fixed processing fee while the others charge up to 3% of the sanctioned loan amount. You should opt for a personal loan to finance your crises if you can wait for a few days. Personal loans are better than cash advance because of fixed monthly payments and low interest rates.

A Debt Settlement Plan will help you pay lower monthly sum with low interest rates. As a result, it will help you focus on a single contribution every month and have less financial strain. A personal loan in the form of a Debt Management Plan will help you negotiate with your creditors for removal of penalties to make your loan amount lower.

Debt Help

Nobody wants to be in debt, but many people find themselves there anyway. People develop gambling debts, business debts, credit card debt, tax debt, and other forms of debt. The best way of coming out of any form of debt is to get help from the various free debt help services available. Each has its own benefits in getting you out of debt faster.

Credit counselors work with you privately over the phone, through email or in person to develop a financial plan to get out of debt. They help you find areas of savings and recommend services like debt management plans or debt consolidation loans.

In debt management plans, you have to give them a monthly payment, which they use to pay your unsecured debts after negotiating lower rates and fees with your creditors. These plans can get you out of unsecured debt in less than five years, with only a minimal impact on your credit score. Debt consolidation loans are used to pay short-term debts with a home equity loan or personal loan. They lower your interest rates and monthly payments. The monthly payments are further reduced with longer terms for your loans. However, it is better to close paid-off accounts to minimize the affect on your credit score.

You can try to reduce your debt through agreements made by debt negotiation companies. Not all lenders may agree to reduce your loan amount, but many will if you declare bankruptcy. With reduced debts, you find it easier to pay them off. However, by using debt negotiation, this point remains in your credit history for seven years. You may be able to get credit within a couple of years, but it will be at subprime rates. This reduced rate also has to be declared as income in your federal and state taxes.

Whatever debt management option you choose, it is always better to research several companies before signing up. Make sure the rates and services are reasonable, and clear any doubts before signing up.