Bankruptcy Articles

A survey conducted by R3, the Insolvency Trade Body, paints a grim picture of dramatic rises in both personal and corporate insolvencies over the next year and a half. The survey also shows some worrying trends in practices of securitisation of debt which places people’s homes in jeopardy. For the first time ever, the UK’s Insolvency Practitioners were asked to predict a figure for the number of personal and corporate insolvencies for 2008 and 2009, based on the last known official figures for 2007. The survey was carried out in conjunction with polling agency Com Res.

Business Insolvency

R3’s President Nick O’Reilly said: “The predicted 41% increase in business insolvencies from 2007 to 2009 is catastrophic and unfortunately will mean we will start to approach the numbers we saw at the peak of the last recession in 1992. For the last three or four years a number of businesses that perhaps were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up.”

Respondents anticipated a rise from the official figure of 13,091 in 2007 to 15,693 for 2008 and 18,440 for 2009, a 41% increase on 2007. This is a conservative estimate as 18% of respondents choose a figure over ‘over 20,000’ as their prediction for 2009.

Some of the biggest reasons for business failures is lack the lack of demand for their product or service or the Company’s ability to have sufficient working capital and when working capital is in jeopardy its imperative that the business moves quickly to raise and cash flow funding. That said in this current environment the difficulty to raise finance can be immensely challenging. One very quick way to raise working capital can be to use Invoice Factoring which can offer business a direct injection of cash from their debtor book.

Some of the other alternative sources of funding a business may wish to consider when facing a challenge to raise finance may be the Sale and Leaseback of their unencumbered plant and machinery or business equipment. Used effectively this tool can be a great way of putting your Company assets back into work capital.

For a more robust appraisal or a complete financial review to see how we could help your business through these tough economic times please contact Enable Finance Ltd. where one of our qualified business and corporate finance advisor’s will be happy to help. Remember you do not have to be a victim of the Credit Crunch but you are going to need to make decisive decision FAST.

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To get a bureau credit report, you can do so from one of three federally recognized credit bureaus: Equifax, Experian, or TransUnion. Each of these bureaus will allow you to get one free report- which means if you access all of them, you can get up to three free bureau credit reports per year. Be sure to take advantage of this fact, and keep an eye not only on your finances, but on your security. If you are working towards repairing your credit, these reports will become especially important.

Oh No- What’s This, A Mistake?

It is vitally important to get a jump on correcting any mistakes, inaccuracies or questionable transactions on your credit report. The longer you put it off, the longer it will take to get to get things straightened out. In the meantime, your credit rating suffers. And thats just the highlight. You can be hounded by bill collectors for services and products you never paid for.

If you locate an error, you will need to send a request to the bureau to challenge the information. Such requests need to be hand-written. The credit bureau has 30 days to get back to you regarding your challenge. During this time, they will be contacting your creditors to verify or disqualify your claims. If they can’t disprove your claim, they’ll change the error in your favor.

You also have the right to make written statements to be included into your bureau credit repair report. These can be added as a permanent part of your report in order for any future lender or whoever to read your side of the story. Say you got caught in Hurricane Katrina and were completely wiped out. Before that, you never missed a loan repayment in your life. This stuff is seriously taken into consideration.

What a Credit Bureau Report is Not

Your credit bureau report will not unfortunately wipe away all details from your bad credit days- such as bankruptcies, repossessions and late payments. Changing such information is not legal.

A bureau credit repair report also is not a new or secondary identity file about your credit history. That also is incredibly illegal ” right up there with fake I.D.s and forged passports.

A word of warning- if you have to make changes to your bureau credit repair report, make sure those changes are actually included in your report. The most effective way to do so is to order another report.

Tags: Debt
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by Jon Ochs

One of the most powerful pieces of knowledge you can have is understanding how the three major credit bureaus assign your score to you. Most often, people are never taught about their credit scores.

Here’s how it all goes …

Payment History 35%:
This is the largest contributing factor for your credit scores and represents your history of making payments with your creditors.

Credit Utilization 30%:
The percentage of available credit used. Keeping your account balances below 50% of the available credit limit will maximize your scores. For the purpose of this article, this is where we will find the most room to quickly increase your scores.

Credit History - 15%
Your credit history reflects how long your credit has been open. Older accounts receive more positive weight than newer accounts.

Recent Inquiries - 10%
Your recent inquiries show any inquiry made to your credit report from a prospective creditor. Too many inquiries can cause your scores to be lowered.

Types Of Credit In Use 10%:
How many accounts and which types. Having too many loans from finance companies (Beneficial Finance, American General, etc.) can bring down your scores.

If you’re looking for a few ways to boost your credit scores, here are some ideas!

Raising Your Limits: Raising your limits is probably easier than you think. Often, all you need to do to get a higher limit is to ask! Call your credit card company and tell them you’re considering a balance transfer with another company that’s offering you a lower interest rate and a higher limit. Mention that unless they are willing to make the same offer, you’ll cease your business with them. If they lower your interest rate, you’re likely to receive a higher credit limit right along with it. Keep in mind that a lower interest rate won’t add points to your credit score, but it’ll still be great for your overall financial health.

Let’s say for example you have a credit card with a $5,000 credit limit, and you currently have a $4,000 balance on it (80% utilized). After your quick phone call, they agree to raise your credit limit to $6,500 (now 62% utilized). This alone will immediately increase your credit scores. Remember in the “Credit Utilization” section above, we want to ideally keep our balances below 50% of the credit limit. This brings us to the next powerful tip.

Lower Your Balances -
Using the existing example, your credit card has a 62% credit utilization on it. You can still maximize your scores on this card. Paying $750 down will bring your balance down to 50% of the credit limit, or having $3,250 balance on a $6,500 credit limit credit card. Even if you can’t afford to pay the $750, you’re still sitting pretty because you’ve already increased your scores by having your limit raised. Keep in mind, though, if you are trying to purchase a home or a car, you can save thousands of dollars in interest on your new loan, and you can also get an even lower monthly payment, just by paying down your existing accounts. That will result in even better credit scores and the terms of your loan will be even better than before!

These are very powerful techniques. I have seen this work for clients time and time again. One client recently was able to raise the credit limits on 3 credit card accounts and raise their scores by 105 points immediately.

Keep in mind that these techniques work best for those who have a good credit history, and at least 3 open, established credit accounts. For those with more challenged credit or a negative credit history, a more aggressive approach and credit repair strategies may be more appropriate.

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2 Things You Can Do In 30 Minutes To Raise Your Credit Scores 40-100 Points

Tags: Debt
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