The Internal Revenue Service has announced that it is changing some of its collection proceedures for delinquent taxpayers as well as steping up collections. While this is necessary to help finance our evergrowing government, it will be an ugly epxerience for many delinquent taxpayers.
When a customer pays for service with a credit card on the last day of May, for example, but the payment does not clear the bank until June 3, Do I record the deposit in May or June?
About 5 weeks ago, Bonnie, one of our Level Three Business Consulting Program clients asked me a question about her private practice. The quick context to the question before I share it with you is that Bonnie had built up a successful Advanced Stage Level Two business (2 locations, steady client stream, talented team members, etc.) but like all business ...
Kim, I think every bank has different strategies to helping businesses during a "work-out." From a banker's perspective, they want to keep your loan current, so most of the modifications that they want to do relate to keeping you paying the interest and staying off their "watch list." Often they will reamortize the loan to help you stay current and sometimes they will defer payments. From their perspective, since interest is an income source for them, the typically always want you to pay some interest during any periods of deferal. For many bankers, seeing a good workout plan and sounding confindent when you speak to them is enough to keep them working with you to set terms you can afford.
I was just talking to someone who is in the situation that you are speaking of. They said they had heard some type of workout where your account is basically put on hold for a period of time, let's say 6 or 8 months to help you get going again. Do you know anything about this program? ...
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You are so right about how the new credit terms will affect everyone. I have a friend that has excellent credit and has always had an open credit line at B of A for over $25K whenever the need arose. She actually decided to use it a week ago, or part of it for some home repairs, etc. but when she called them to have them send her a check, they suddenly lowered her limit to only $1000 over what she already owed. She was furious. It's bad that those with great credit will be affected by the ways of others who are beyond their control, but until the credit companies start getting control of what they have outstanding, this will be the case.
By: Kim Shufordon6/29/09 at 11:55 PM
Guest Post: Credit Card Accounts In Good Standing No Longer Guarantees Favorable Terms
It would be nice to see some people stop over spending, but people seem to live according to what they make. You can give someone a substantial raise and if they're not careful, their budget (actual bills, not savings) will encompass their total income within a pay period or two. Hopefully, some people are learning to cut back and will make these changes a way of life. I guess time will tell.
By: Kim Shufordon6/29/09 at 5:45 PM
Will Frugality Really Become a New Way of Life for Americans?