Some Reasons Why Hiring Accountants

Some Reasons Why Hiring Accountants

            Some people do not know how to manage their financial very well, and the result they are facing bankruptcy. Basically, to prevent them from bankruptcy is quite easy. These days, there have been a lot of ways that they can do to avoid bankruptcy, one of them is by hiring some kind of Accountants for helping them with their money. But what is actually an accountant? Basically, an accountant is people who work by accounting and estimating money and budget in financial terms. There are a lot of degrees these days that offer accountant degree, and since it gives a lot of opportunities and chances for people, so many people are interested to take this kind of degree.

            However, not all of people see the need of hiring this kind of profession, because of several important reasons. One of the most common reasons that people have, about why they do not hire accountant for their business and their financial is, because they have to spend a lot of money for hiring them. That is why it is only them who have more money who can hire this kind of people to help them with their financial problem. But of course it will be worthy with the helps that they can get.

Tags: , , , ,

Help Me Get Out Of Debt – 7 Tips To Success

Help Me Get Out Of Debt – 7 Tips To Success

Help me get out of debt..

This is a plea that many people have had over the past several years. Debt is with us and it is a burden that weighs us down. Been there, done that and I understand your debt problem. There is relief though, but getting out of debt is not easy and does not happen quickly. This is what worked for us and how we did it.

I read recently that a Consumer Reports poll indicated that 53 percent of consumers used a credit card to pay for all or some of their holiday gift purchases. At one time or another, I think all of us have run up our credit card bills and ended up paying exorbitant interest rates to pay for it.

If you’re struggling to pay off credit card debt or other debts you’ve been carrying for some time, don’t despair. It is possible to pay them off without going consolidating or walking away from them. The important thing is to recognize the debt, find out what you are spending money for and cut your expenses. Then make a plan, a “Get Out Of Debt Plan”, to pay off your debt and follow the plan.

It looks rather simple on paper, but is a little more difficult in practice. We always start getting out of debt, but sometimes we need a little more information and guidance to make it happen.

If you are not already in default, here are some tips that can help you make a realistic plan to get rid of your credit card debt sooner rather than later.

1. Find out what you really owe and what you are paying.

Guessing about how much you owe and how much you are paying for bills is kind of like shooting at a target with blinders on. You might get close, but you will never know if you hit it. And kidding yourself or ignoring your credit card bills won’t make them go away.

Here is what you can do instead.

Get every statement and credit card bill and make a list of everything you owe and everything you pay so you can tally up your debts. Sort this list and identify essential expenses and unsecured (think credit cards) debts. You want to tackle each category of debt separately to cut your expenses and pay off or down your debt.

Then sort it again to list your credit card debt lowest to highest balance, payment or interest rate. Sort any way you like. Personally, I like to sort by the lowest to highest balance. That way, when it is paid off, the money can be diverted to the next lowest until it is paid off.

2. Set some attainable goals

Avoid making a general statement or a New Year’s resolution to just “pay off my credit cards” or “get out of debt”. Generalities are not specific enough and make it hard to devise a plan that will work. Be very specific about which bills you want to pay off and when you want it to happen.

Your goal might be to pay off a credit card debt by a specific time. Or pay a certain amount toward a card until it is paid off. What is really necessary it to devise a plan that will work to cause you to become debt-free. Being very specific about your objectives can help you realize your goals that much faster – and might help you recover from a crushing debt load sooner than you think.

Paying the minimum amount due will not get you out of debt. But it is a great way to give more money to your credit card company and keep you in debt to them for many years.

Consider this tip: When you set your goal and select your method, try paying the minimum due or a specific amount, plus accrued interest, plus any fees or charges. This will make the entire minimum payment go toward the principal and you can actually calculate when it should be paid in full.

If you can only afford to do this with one credit card, make it happen. Pay off your credit card with the lowest balance or highest interest rate, then transfer that money to the next card or debt in your get out of debt plan.

3. Stop buying things with credit cards

As obvious as it seems, you cannot get out of debt when you continue to create debt. Yet, that is the way a lot of people choose to eliminate their debt. Consolidation might work, but you should give yourself a chance to get your budget and get out of debt plan on track by stopping the debt cycle dead in its tracks.

Cut off the credit card spending and focus on using cash as much as possible. This will cause you to question every purchase and help you spend more wisely. That being said, keep in mind that most people will use credit in an emergency. But stop all credit card use for everyday expenses.

Whenever you are considering spending money on anything other than essentials or to pay a debt, ask yourself this question, “Is this a want or a need?” If it is a need, spend the money. But if it is a want, then you probably do not need to spend the money for it. What we are asking you to do is to change your spending habits. Think about what you are buying and why you are buying it.

4. Transfer your balance to a low rate card

Consolidation or borrowing money to pay off debt very seldom works and is not one of my favorite things to do. But, a lot of banks and credit card companies are making zero or low interest rate offers on balance transfers. And you might be able to save a considerable amount of money if you can transfer a balance from a high interest credit card to one with a low-interest or zero-percent interest rate. This can help you reduce the total balance much faster.

Two things though:

Before you sign up for a zero or low interest card, talk to a real person and make sure you can transfer the entire balance to the new card. Many times, the new card company will just transfer part of the balance. If you cannot transfer the entire balance, pass on the card. All this does is spread your total debt over more cards and will not save you any money.

Make sure you know what the interest rate will be after the promotional period is over. The rate could higher than what you are paying now and may make it more difficult to pay off the debt in the long run.

Check out websites like CardRatings.com, a free credit card comparison site, to shop around for the best credit cards offers based on your credit rating and spending patterns.

5. Overhaul your budget

This could be the second step in the plan. You may have two goals in mind. Paying off your credit card debt and reducing your living expenses. Saving money on living expenses and fixed debts will free up some money and will help you pay off your debt.

If you want to save money, you should re-evaluate your budget to see if you can reduce some essential expenses, like utilities, insurance and groceries and any non-essential expenses, at least temporarily. Non-essential means different things to different people, so you have to decide what a non-essential expense is for yourself. Any expense you can reduce will free up extra cash that can be used to help make your get out of debt plan successful.

If you find it difficult to save enough money by revisiting your essential and non-essential bills, then you might consider taking on a part-time job to increase your income and use the extra money to help pay off your debts.

6. Keep the basics of the plan in mind:

  • List all your debts and expenses.
  • Prioritize them. Learn what is essential and non-essential.
  • Eliminate credit card spending so you can shift your focus to cash-based spending and stop the debt cycle in its tracks.

7. Take time to let the plan work

You did not get in debt overnight and you probably will not get out of debt overnight. It may take some time, but with a good plan and realistic goals, you will see a big improvement in your financial situation.

Above all, do not be intimidated or discouraged by your debt. Debt did not happen overnight and will not go away overnight. But overhauling your budget and your spending priorities can help you get ahead of your finances and pay off your debt forever.

By Marshall Crum
Tags: , , , ,

Debt Collection Enquiry Could Affect Credit Score

Debt Collection Enquiry Could Affect Credit Score

Once a debt is taken over by a debt collection company, it is understood that the debtor has been delinquent in his payments. If the original creditor sees that one is paying his debts in a timely manner, it would certainly deem it unnecessary to have the debt sold to a collection agency. However, if it is experiencing problems with collections, it would rather sell the debt to a collection agency and unburden itself of the task of making the collection itself. On the part of the debtor, this may seem to be a harmless transaction between the original creditor and the debt collection agency.

However, the transfer of debt to a collection company does have an adverse effect on the debtor. Because of the fact that a collection company is dealing with him, the debtor’s credit score could be affected in a negative manner. It is only expected that the credit rating would be reduced. As mentioned already, when a debt is dealt with by collection agency, this could only mean that the debtor has been delinquent. Of course, a delinquent debtor should not expect any positive impact on his credit score. Instead, what he may already have would still drop by a few points.

The problem here is that unlike lending firms and banks, the debt collection agencies may not immediately fix their records to show that your credit score deserves to be raised. For example, one may have already finished paying his debts and the collection agency may have acknowledged this in their records. However, there may be no means for credit score to be adjusted by the entity that does the rating. The reason for this is that the said entity may not have any means of getting the information automatically from the debt collection agency. The debt collection agency, for its part, may not also inform the credit score entity.

Having a low credit rate could be such a problem for any individual. This could discourage other creditors from approving loan requests made by him. In these times when paying in cash is not only impractical but also impossible sometimes this would really be a huge limitation. As much as possible, one should really keep his credit score high in order to enjoy certain parks. One of this is in connection with the amount of loans that could be obtained. One with a very low credit scoring would never be allowed to make bigger loans.

This is the reason why an individual who has completed repaying his debts through the debt collection agency should actually make sure that his credit score remains high or, at least, at an average. This could be done by actually asking the debt collection agency to fix their files and update these so that your actual credit status would be the one reflected. If you have repaid all your debts, this information should be found in such files. In making the credit rank, the bases would actually come from this information.

By Jim Oneil
Tags: , , , ,

IVA or Debt Management Plan – Which Is the Best Debt Solution?

IVA or Debt Management Plan – Which Is the Best Debt Solution?

We ask whether the IVA debt solution or a debt management plan is a better option to choose if you are looking for debt management solution. If you are trying to decide how best to solve a debt problem, the two solutions you are likely to consider are individual voluntary arrangements (IVA) and debt management plans (DMP). The two solutions are different and have very different implications for you and any assets that you have. Because of this whether you chose an IVA debt solution or a DMP will largely depend on your personal circumstances and your attitude to repaying debt.

How quickly do you want to be debt free?

The fundamental idea behind a DMP is that you will still repay all of your debt. However your payments are reduced to fit within a budget that you can afford. This means that using a DMP will considerably increase the length of time it takes to repay your debt. Despite this if you are eager to try and repay everything that you have borrowed a debt management plan will allow you to do so.

On the other hand, the IVA debt solution only lasts for a fixed period of 5 years. You pay what you can afford for 5 years and after that any unpaid IVA debts are written off leaving you debt free.Doing an IVA and getting IVA help is therefore probably more appropriate for you if you want to try and become debt free as soon as possible.

How much do you owe?

You can use a debt management plan for any amount of debt. So whatever the size of your debt you can always start a DMP. However you must always compare the amount of debt you owe to the amount you can afford to repay each month. Bear in mind that using a DMP you will have to repay everything that you owe. So if your debt is large compared to the amount you can pay it is likely to take a very long time to repay everything in a DMP. An IVA debt solution is generally appropriate if you have debts of more than £15,000. Even if your debt is very large compared to the amount you can repay, individual voluntary arrangements will still only last for 5 years as unpaid IVA debts are written off.

Who do you owe?

DMP and IVA debt solutions can only be used to deal with unsecured debts. Unsecured debts are things like credit cards, bank loans overdrafts and payday loans. If you are having difficulty with secured debts such as your mortgage or car HP, you cannot use an IVA or DMP to directly reduce these debts. There are also certain unsecured debts which cannot be included in DMP. If you owe money to HMRC (Inland Revenue) or you have business debts because you are a sole trader you will not be able to use a debt management plan to resolve these problems. However you can include these types of debts in an IVA debt solution. Getting IVA help would therefore be better if you owe money to HMRC as HMRC can be included as part of your IVA debts.

Are you a home owner?

It is important to consider the differences between debt management plans and individual voluntary arrangements if you are a home owner. As a home owner if you use a debt management plan you will not have to release equity from your property to help repay your debt if you do not want to.

However, if you use an IVA debt solution, you must be prepared to agree to releasing equity from your property to help increase the return that your creditors get. If you do not want to touch the equity in your home, you may therefore be more interested in a DMP

Weigh up all the options

When deciding how best to solve your debt problem you should consider both debt management plans and individual voluntary arrangements. Having said that, generally speaking if you have smaller debts which you are happy to repay in full or if you are a home owner and you do not want to release equity you might favour a DMP.

On the other hand if you have larger debts that will take many years to repay using a debt management plan or if you owe money to HMRC this can be included as part of your IVA debts and so an IVA debt solution may be better suited to your needs. Ultimately however before you make your decision about which solution to use you must always take advice from a debt specialist you can explain the options and what they will mean for you.

Both IVAs and DMPs have specific advantages and disadvantages which will become more or less important depending on your particular circumstances.

What to do next

If you are struggling with debt and are considering an IVA, visit beatmydebt.com. Our experts are available to speak to you about the IVA problem and offer further help and advice. Our vibrant debt forum gives free access to experienced industry experts and others who have suffered with debt problems and have been through the IVA process themselves. Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.

By James Falla

Tags: , , , ,

Can I Do an IVA If I Am Self Employed?

Can I Do an IVA If I Am Self Employed?

We consider whether you can use an IVA to resolve your debt problem if you are self employed and the main issues you will need to think about. If you are self employed you can certainly use an individual voluntary arrangement (IVA) to resolve a personal debt problem. In fact, the IVA was originally introduced into the law as a solution specifically designed for people who are running businesses.

However the fact that you are self employed means that before you can start the IVA application process, there are some things that have to be more carefully considered than if you were simply an employee.

Sustainable income

The first and most important thing to understand is that to make an individual voluntary arrangement work, you must be able to make sustained payments to your creditors each month normally for five years. As such, you must be as sure as you can be that your business can pay you an income that will cover both your reasonable living expenses and give enough to cover your reasonable IVA payment. Because you will normally not be receiving wage slips, you will have to prove your income by providing a history that your business has been trading (your last one or two year’s accounts) and a cash flow forecast for the next 12 months.

The important thing here is your cash flow forecast. This shows the cash you will have coming into your business. It must also show that the drawings you plan to take from your business each month are sufficient to support your living expenses needs and your IVA payment.

What debts are included?

As a sole trader, you are likely to have some personal and some business related debts. As you are personally responsible for any business debts that you have, these will normally all have to be included in your IVA. This includes business credit card and overdraft facilities which you will then no longer be able to use. Of course including these creditors in your IVA could be potentially damaging for your business so this has to be very carefully considered and planned.

If you owe money to HM Revenue and Customs (HMRC) then this debt must also be included in your IVA. In fact, because HMRC will normally not allow debts owed to them to be included in a debt management plan (DMP), starting an IVA may be one of the only ways to prevent HMRC petitioning for your bankruptcy due to unpaid tax debt.

Banking facilities

If you owe money to the bank where you keep your business account, then it is likely that you will have to change your bank to protect your funds. This is because when your bank realises that you owe them money that you cannot repay, they may well become concerned about the viability of your business and withdraw any overdraft and credit card facilities you have on your business account.

In addition, the bank can apply the right of offset across your business and personal account drawing money from one to pay the debts in another if there is no other source of funds. If you already have a poor credit rating, then opening a new business trading account may not be easy. Where this is the case you may have to open two new personal accounts and use one for your business affairs.

Just started trading

If you have only been trading your business for a short while, the problem is that you will not have any historic trading information to prove to yourself and your creditors that your business is likely to be able to sustain you and your IVA payment. If your business case and cash flow forecast is very strong, then you may still be able to start an IVA straight away. However, it might be more sensible to delay your IVA application until you have some trading experience under your belt.

In these circumstances, you should perhaps start a debt management plan initially to give yourself some breathing space from your creditors and time to get your business up and running. You can then change from your DMP into an IVA perhaps after six months once you are comfortable that your business and the income it generates are sustainable.

What to do next

If you are struggling with debt and are considering an IVA, visit beatmydebt.com. Our experts are available to speak to you about the IVA problem and offer further help and advice. Our vibrant debt forum gives free access to experienced industry experts and others who have suffered with debt problems and have been through the IVA process themselves. Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.

By James Falla

Tags: , , , ,