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Month: February 2020

Divorce Settlements and How to Distribute Debt – Consolidating loans

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It is routinely stated that fifty percent of marriages end in divorce. No matter how high specified that statistic can be, the truth is that many marriages do end. Part of splitting with your spouse means taking care of debt that arose during the divorce. In a perfect world, both people walk away for the debts they created and with those debts in their own name. Unfortunately, that state of salvation can be unreachable.

 

Legal Liability for Debt

Legal Liability for Debt

In a community of property state, debt incurred during the marriage will not necessarily be divided according to which partner’s debt. Instead, you can both be equally responsible for debts that are made only by one partner, even without the knowledge of the other spouse.

In other states, fair distribution states, the court will assign the blame responsibility based on the blamed person. Typical debt belongs to the ex-spouse whose name is on it. That would leave you on the hook for your debt and your spouse on the hook for them.

No matter how the court distributes the debt, the banks still expect you to pay the debts in your name. The original credit card or loan agreement replaces a divorce, at least in the eyes of the bank. Debt distribution can create a problem when a spouse has been sentenced to make payments on a debt that is not in their name or one that is held jointly.

Let’s say your ex is responsible for making payments on a credit card in your name. Your credit is affected when your ex-spouse does not track payments on accounts with your name, even joint accounts. You can take legal action against a spouse who is not going to court to take payments into the account. But by the time you go to court, your credit may already be ruined.

 

Work Out Debt Issuers For Divorce

Work Out Debt Issuers For Divorce

Try to get the debt in the name of the spouse responsible for the debt has been completed. This will not be easy and requires both to work together, but the hard work will be needed to get you off the hook for debt that is not yours. For credit card debt, that can mean transferring balances from other credit cards or consolidating the funds with another loan.

Major loans such as mortgages and car loans are more difficult and often require the refinancing of the loan in just the name of a person, ie the person maintaining the assets. If the divorce has already been completed, the lender may allow you to remove your name from the loan and replace it with the name of your ex-spouse. You may need to divorce them stating your ex-partner is responsible for the mortgage payments. If this does not work, consult with your lawyer about having the court sell the asset and use the proceeds to pay off the loan to avoid default.

 

Bankruptcy an ex-spouse may affect you

Bankruptcy an ex-spouse may affect you

Your ex-spouse may choose to file for bankruptcy if they cannot keep up with debt payments and other financial obligations. However, their bankruptcy does not protect you unless you serve as well. In fact, it would get worse for you if your ex-files go bankrupt

When a former spouse files bankruptcy to take away their joint debts, these debts are not cleared in bankruptcy court. Instead, bankruptcy wipes that person’s liability for the debt. The creditor will pursue the remaining debtor, the one who does not file for bankruptcy, for the full amount of the debt. Sometimes the bankruptcy may wind down on your credit report, even though you don’t have the one filing the bankruptcy.

 

Protect yourself against future Debt

Protect yourself against future Debt

Be careful about leaving joint accounts opened after the divorce, or even leading up to it. Leaving a credit card or line of credit open is dangerous. Your ex-spouse can balance from their own accounts accounts that you hold together. Or they can incur the balance making you pay for purchases.

In the case of authorized user accounts, the creditor only holds the primary account holder responsible for the debt. However, non-payment on the account could affect the authorized user’s credit history because the account is listed on their credit report. A simple phone call can solve authorized user issues.

To protect your credit, you can choose to pay yourself off the debts and go back to court to have your ex-spouse repay you. This can be expensive, but it is the alternative to losing your good credit. Realize that if you pay off the debts, you can never get the money back from your ex-spouse, even with a court order. Alternatively you can file for bankruptcy, but consider it careful since the bankruptcy stays on your credit report for 10 years.

Apply for start-up loans – that’s how it works

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Once you have decided to start your own business, in most cases you will quickly be looking for support programs for start-ups. As is known, there are various options available that start-ups can use, but unfortunately, the application for public federal funding is often relatively complicated.

The most well-known federal promotional loans

The most well-known federal promotional loans

Include the Good Credit entry fee, the ERP capital for start-ups, the Good Credit entrepreneur loan, and the Good Credit entrepreneurial capital, because, with the help of these promotional programs, things like operating resources, warehouses and property, plant and equipment or fixed assets can be financed. Among other things, the purchase of real estate or costs for operating and office equipment is promoted.

An application for a federal promotional loan must always be submitted before the start of the project or the planned investment. Accordingly, the self-employed should neither commission services nor order goods or even sign a sales contract if the financing is not yet secured. However, it is not a hindrance to a promotional loan if the business or freelance activity is already registered with the tax office or the trade office.

Companies that are in financial difficulties or represent a restructuring case are excluded from the subsidy. Accordingly, no refinancing or debt restructuring can be realized with a federal subsidy loan.

The application for a promotional loan

The application for a promotional loan

It is always made to the respective house bank, regardless of whether it is a savings bank, a bank or the Good Finance. You should have an account or business account with the relevant bank, although this is not a prerequisite for applying for a promotional loan.

The credit advisor or bank advisor usually helps to fill out the loan application, but it is necessary for the applicant to bring all the necessary documents with them when making the application.

The necessary documents include the business plan, the investment plan, a sales forecast, a list of all debts and assets, a tabular curriculum vitae, an overview of existing collateral and a liquidity plan on a monthly basis.

It may be necessary to have an equity component for the granting of the promotional loan, for example in the case of ERP capital for start-ups of 15% (10% new federal states).

First, the house bank examines the loan more closely and decides in this context whether the application will be forwarded to Good Credit, whether the overall financing project will be rejected or whether it will offer the applicant its own loan. There is no obligation to forward the application, but should the bank decide to forward it, Good Credit-Bank will re-examine the loan application, which can take 14 or 21 days.

Since the funding is always earmarked

Since the funding is always earmarked

The entrepreneur or self-employed person must first submit the corresponding invoice or the order for the planned investment; only then does the house bank arrange for the funding to be transferred to the business account of the recipient.

In addition to various types of collateral, some promotional credit programs require the presentation of Credit Bureau information, including entrepreneurial capital – ERP capital for start-ups, Good Credit entrepreneurial credit with exemption from liability, the ERP innovation program and entrepreneurial capital – Good Credit capital for work and investments.

Digital process optimization of corporate loans

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FinTechs are increasingly pushing into the SME finance market. But classic financial service providers counter with fully digitized processes and a lot of experience in corporate banking. In the end, the customers benefit.

Companies looking for suitable financing are now also finding what they are looking for on the Internet. The range of offers ranges from provider-independent financing intermediaries to arranging loans, in which private investors act as lenders. And some banks are already getting involved in lending in cyberspace. Which offer is worth a click mainly depends on the planned financing project.

 

Credit marketplaces: financing in the algorithm

Credit marketplaces: financing in the algorithm

Financing platforms work according to the broker principle: companies enter their financing plans online on the provider platform and, after checking, receive a selection of offers from partner companies, for example commercial banks or leasing companies. One of the main promises of the financing platforms, in addition to independent product and provider comparison, are particularly simple and fast processes. The financing platforms rely on digitized application routes and databases lined with provider criteria and risk parameters. So the theory.

In practice, however, this process is often still difficult. One hurdle at the moment is above all the automatic checking of the key figures with regard to a reliable rating or the very complex connection to the scoring models of the bank partners. The marketplace concept can only be optimally represented when all data, eg from balance sheets and credit checks, can be automatically imported via interfaces. In the end, it is often the case that the marketplaces pass the customers on to their partners after the preliminary check and the negotiations then take place directly between the customer and the bank.

 

Crowdlending: credit from everyone

credit from everyone

Crowdlending platforms follow another principle: on the one hand, they act as a middleman for financing through professional investors, such as foundations and specialized funds, which provide the means of lending against a corresponding return. On the other hand, they mediate classic crowdfunding, in which a large number of private donors also raise the amount of the finance for a corresponding return. One or the other financing project, which from the perspective of banks is not sufficiently secured, gets a chance with crowdlending.

But there is no guarantee of funding for crowdlending either. And the borrowers pay the willingness to take risk of the lenders with a mostly clear interest premium. Companies hoping for financing from private investors must also be prepared to present their financing project in detail to a broader public.

 

Entrepreneurs remain skeptical

corporate loan

Online credit marketplaces in Germany are still rather difficult. According to a survey by the auditing firm Deloitte in 2018, only 2 percent of small and medium-sized companies in Germany plan to process their financing exclusively online in the future. A third therefore relies on a combination of personal and digital processing. More complex financing projects will probably continue to be implemented in the foreseeable future in direct contact with the personal financing advisor, especially since various financing modules and collateral situations are often to be illustrated here.

 

Banks go along

Banks go along

Here the classic financing providers score again. Especially since they have also started to enable their commercial customers to use purely digital processes for borrowing or to digitize the first process steps in the more complex segment. Lite Lender Bank is a pioneer in digital lending: Since spring 2018, it has enabled your customers to take out fully digitized borrowing including e-signature and video legitimation for business loans for the first time. Thanks to the smart digital process, payments are often made within one working day of the application.

In the area of ​​more complex financing structures, Lite Lender Bank now offers its customers to send the annual financial statement documents in a secure procedure directly via the tax advisor / auditor in digital form. This streamlines and speeds up the process considerably. The next steps to improve customer convenience are about to be implemented.