Debt Management UK – Latest Debt Management UK news – what is the role of debt management
Posted on | December 19, 2009 | No Comments
How about these right… I think you’ll find the following nuggets of wisdom particularly insightful. Leave your comments below. Check out the second one in particular…
what is the role of debt management
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Can Unsecured Creditors Garnish Wages To Recover A Debt?
Wage garnishment is a term used in the US for a legal order whereby money is taken directly from the wages of a person to pay a debt owed to another person or company. It is not something that can be done without a court order, so unsecured creditors are not able to garnish wages directly without going through a legal process first.
For a creditor to garnish wages they have to first secure a judgement from the court by suing you. Before your wages can be garnished you must have lost a law suit over the money that you owe. There will then be a court judgement against you which in turn allows them to garnish your wages.
Each state has different laws on allowing unsecured creditors to garnish wages and there are always limits on how much may be garnished. The state laws vary quite a lot, but on average the limit on how much of your wage can be taken is around 25% of the net income. It is permitted in all states to garnish wages for child support, student loans, alimony payments or tax arrears, and for some of these the allowed limit can be as high as 50% of wages. If you already have other garnishment orders in place, any new order will have to wait until the existing order is complete.
If an unsecured creditor does garnish your wages you can try to challenge the judgement, but you will have more chance of changing things if you start to negotiate earlier in the process. Ideally you should take steps to avoid getting anywhere near being sued or having a company garnish your wages. This process sometimes happens simply because there has been no communication about the debt.
Debts are never resolved by ignoring them and there are several well tried systems you can use for dealing with serious debt problems. If you show your creditors that you are as upset as they are about not being able to pay, and that you are serious about taking steps to change the situation, you are far less likely to be sued or have them garnish your wages.
The simplest way to tackle debts to more than one unsecured creditor is to use a debt management plan. These are offered by debt manageme
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nt companies and are widely used in the US and the UK. They are a way to consolidate all your debts into a payment plan that reduces the amount you pay out on your debts. The creditors are persuaded to alter the details of how your debt will be paid back, which results in lower charges for you and only one payment to think about.
To be eligible for debt management you have to have a job that gives you a regular income and your debts must be to two or more unsecured creditors. You will need to find a debt management company that you can depend on, and you can improve your chances of getting the best deal by applying to a few and comparing what you get back. You can ensure you do not make the mistake of applying to any dishonest companies if you start by using recommendations for organisations that have been verified as among the most reputable and well proven in terms of ethics and record of success.
By: K D Garrow
Article Directory: http://www.articledashboard.com
Read recommendations for the best debt management companies in the US and UK on the author’s Debt UK/US website, which offers free advice on debt issues, including debt settlement online.
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Business Debt Relief – Good Management Practices
Double entry bookkeeping is an accounting technique to record the financial transactions of a business where every transaction is entered twice, equal and opposite transactions. Double entry is required for all businesses that must produce both a profit and loss account and a balance sheet.
All limited companies are required to produce a statement of assets and liabilities and maintain a system of financial control and invariably need to adopt a system of double entry bookkeeping usually using an accounting software package.
The same rules may not necessarily to self employed business that does not require to produce both a profit and loss account and a statement of assets and liabilities as the final product of the financial accounting. In the UK a balance sheet is an optional requirement of self employed business.
There are advantages and disadvantages in preparing financial accounts using self employed bookkeeping. The main advantage being the simplicity with which accounts can be produced requiring a much lower knowledge of accounting systems. The main disadvantage of single entry bookkeeping is the absence of financial control due to limited detailed records of asset and liability accounts.
Preparing accounts using single entry bookkeeping involves recording the prime financial transactions once rather than twice. Prime financial records include sales income, purchase expenses and cash or bank transactions.
As the accounts do not require to produce a trial balance and balance sheet then when using self employed bookkeeping recording cash and bank transactions is not strictly necessary but highly recommended to provide additional financial control. While cash and bank transactions are movements of assets or liabilities and not part of the income and expenditure account accurate cash and bank records are useful since cash flow is a highly critical area for small business.
In the absence of a double entry bookkeeping system the small business has less control over the debits and credits of the business. That being the amounts owed for sales invoices from customers who are called debtors and the amount owed by the small business to suppliers who have supplied goods and services on credit and are called creditors.
What is required from commercially available single entry bookkeeping software is not just an accounts package that produces the profit and loss account but also has additional facilities to assist financial management and control of the business by providing optional areas for cash, bank, debtors and creditor accounts to be maintained.
Mismanagement of small business finances is a major area which can drive a small business into liquidation and bankruptcy. The first lesson an accountant might learn when studying accounting and financial control is that the business must always have sufficient cash or availability to cash resources to trade the next day. Bank records and maintaining a positive cash flow is important as without liquidity the business cannot trade..
In a similar vein control over debts owed to the company and owed by the company is also important for the smooth operation of a small business. Bad debts from clients can cripple a small business in fact high levels of bad debts can cripple any size of business as evidenced in recent times with the so called credit crunch. Lack of control over unpaid purchase invoices to creditors can result in serious disruption and higher costs since suppliers stop supplies and may charge recovery costs and relentlessly chase up the debs taking up valuable time.
The conclusion then is while single entry bookkeeping is a viable option anyone who adopts a self employed style of bookkeeping to simply produce a profit and loss account, or income and expenditure account should also have supplemental systems to control assets and liabilities. Bookkeeping software can produce a solution by adding additional financial control.
The advantage of using a single entry bookkeeping system involves the simplest form of keeping records of financial transactions. Essentially the small business makes two lists, one of income received and one of expenses incurred. Using single entry might involve virtual zero accounting or bookkeeping knowledge.
When recording the financial transactions in the two lists of income and expenditure a small amount of extra detail can have magnificent effects on the quality of records produced by grouping together items of a similar nature.
When entering sales invoices or income received to produce the sales turnover total a small amount of analysis can save much time and produce a more sophisticated result. For example the sales can be listed in one column to produce the overall sales turnover but also analysed to a small number of additional columns in which could be entered different types of sales income.
The additional columns might be for different types of product or sales from different sales channels, sources, or perhaps used to separate out interest received if tax differently to business sales income. Some analysis of purchases is usually essential as only the tiniest business would get away with lumping all purchases together as one total.
Single entry bookkeeping would involve making a list of all purchase invoices for goods and services. The analysis of those purchases then achieved by listing each invoice again in an analysis column according to the type of expense incurred. Bookkeeping software should include a simple expenditure analysis.
Having produced the list of sales and the list of expenses all the information is then available to produce an income and expenditure account. Enter the totals from the single entry bookkeeping sheets on a separate sheet with sales income at the top, a list of expenses under each purchase expenditure category. Take the total expenditure from the total sales and the result is the net taxable profit. Bookkeeping software should automate this process.
The financial accounts based upon a single entry bookkeeping are complete and a net taxable profit produced for the tax authority.
About The Author
Terry Cartwright a qualified accountant at DIY Accounting in the UK designs accounting software for limited companies at http://www.diyaccounting.co.uk/selfemployed.htm on excel spreadsheets using a double entry bookkeeping system http://www.diyaccounting.co.uk/bookkeeping.htm
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