Repayment rate and debt restructuring.On January 20, 2020 by Ethelyn Murphy
If the repayment rate is depressing and the debt restructuring leads to a permanent burden
Young companies need liquidity. Public subsidies are an attractive way of financing a young company. This has the advantage that the entrepreneur does not have to pay high installments from the start, since this financing instrument usually ensures early years without repayment. However, such an advantage can easily turn into a disadvantage, because at some point the time will come to pay off! If the entrepreneur then has to service this repayment from overdrafts, an economic situation is quickly created which is expensive for the young entrepreneur.
In many cases, after the actual debt reduction, there is nothing left for normal life. Such situations are used more and more by financial service providers who offer so-called loan summaries to companies in need. As a supposed advantage, a significantly lower monthly amount is mentioned, which has to be paid in advance. With such constructions, however, borrowers are drawn even more into the downward spiral because the additional burden has an impact for years to come. Only a short start time is associated with a financial relief. However, entrepreneurs like to use these services because at some point they have lost track of their numerous installment obligations.
Original term of the existing loan
The rates will be reduced accordingly by the new service, but conversely the duration will be increased three times over. And the longer the term, the higher the interest. Whoever accesses here is already preprogrammed for life-long over-indebtedness. A credit summary runs as follows. First, all current loans are canceled by the financial service provider. The remaining outstanding debt is then repaid all at once. The sum of these repayment amounts now gives the financial intermediary the total amount of the new net loan. Interest, fees and insurance are added to this amount. The resulting gross loan is, however, many times higher than the old loan.
In order to recognize the dubiousness, the new loan should simply be calculated using the original term of the existing loan. In this case, the rates would be twice as high. The result: After the bankruptcy, the private bankruptcy follows seamlessly. Those who risk being ripped off by alleged bankruptcy helpers also risk it. Such dubious company buyers appear more and more, they smash the entire ailing company and make the old owner liable for it. Even if legal measures are not necessarily to be feared, the reputation of former business partners is ruined. In most cases, the entrepreneur no longer gets a foot on the ground within the industry.
There is no doubt that there are serious company buyers who take over companies that are in trouble. But more and more cases are accumulating, in which dubious contemporaries appear and buy bankruptcy businesses for a secret hand money of often 10,000 USD and more and thus do a lot of mischief. It is not uncommon for goods to be cheerfully ordered with the bank that you just acquired and then sold again. This other company naturally acted in “good faith”. On the other hand, it goes without saying that the goods ordered are never paid for. The entire documentation is also handed over to the shredder, so that research is not exactly easy to do. The tax office, health insurance companies and insurance companies, however, are waiting in vain for taxes and duties.
Bankruptcy loss nor unemployment benefit
This is followed by deletion from the public commercial register because many companies are relocated somewhere in the east of the country. With a straw man as managing director, the “specialists” act effectively: it takes a few months for the company to be registered at its new headquarters. As soon as creditors or prosecutors have found the “new” bank with difficulty, the next move will take place. This game continues until the creditors run out of air. And should there be a conviction, then at least nothing more can be obtained in this way (cash). It is therefore only possible to warn against such transactions. In addition, the seller of a bankrupt bank must expect unpleasant consequences if it can be proven that he was aware of the intentions of the buyers.
So if you want to get rid of your company, you should not put yourself in the hands of such dubious contemporaries, rather a clean bankruptcy is the far better method in the long run if a new start is planned afterwards. It is not uncommon for this to be a completely unintentional breakdown. In the future, it is also to be feared in this area that ailing companies will continue to be transferred to third parties in the event of bankruptcy, in order to subsequently exploit and bury them professionally. Therefore, such advertisements always sound very promising for those affected and therefore have their place in reputable newspapers, according to the motto: “We buy your bank with liabilities, immediate takeover possible.”
However, bankruptcy fraudsters are almost always hidden behind these advertisements. Many bosses are also of the mistaken opinion that they only need to transfer a sickly company, pay between 10,000 and 15,000 USD and are thus relieved of all worries. However, this is a serious mistake, because the buyers have everything else in mind than – as agreed – to liquidate the company seriously. Rather, they systematically slaughter the company, monetize all existing values or order new goods from unsuspecting suppliers. In all of their plans, the bankruptcy fraudsters use a straw man as managing director and then relocate the bought bank.
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