"Deb consolidation will help you to increase your cash flow by looking at your overall credit position
and employing sensible financial strategies."

Looking at Improving Your Cash Flow?

A small business owner should invest in, and become familiar with, accounting software that controls Accounts Receivable, Accounts Payable, Inventory (if carrying) and General ledger. Close monitoring of your receivables, especially, will allow you to keep better track of what you have coming in.

A few ideas for generating cashflow for your business -

• Offer small discounts or other incentives to customers who pay promptly or before the "due" date.
• Always do credit checks on your customers.
• Track your accounts receivable to identify slow paying customers.
• And most importantly - watch your expenses closely.
  

Reduce Your Debt

• If your credit card debt is out of control, the first thing you should do is to find a new card with a lower interest rate. Your interest payments could be almost cut in half if you reduce your interest rate by just 5 percent.
• Register your bills with your bank online. The advantage to doing this is that you'll become accustomed to making regular payments in a timely manner. Having your bills paid automatically is also a great buffer against late fees, which can cost you as much as $40 a month - or $480 a year.
• If you have a mortgage with an adjustable interest rate, you may well be in for some higher monthly costs once that rate adjusts. Check your mortgage documents for rate caps - that's the limit on how much your rate could rise once the introductory fixed rate period is over.
• To protect yourself - and your wallet, think about locking in a fixed rate. Even at 6.42 percent, it's a bargain compared to long-term averages of 8 percent or more.

Understanding Debt Settlement

The credit reporting system provides little incentive for you to pay off your debt. If you ignore the debt long enough, you stand a good chance of never hearing from the creditor again. Seven years after the debt is written off, the negative listing disappears from your report altogether. But if you pay the debt sometime before the end of that period, the seven-year cycle starts all over again— not exactly what one would call an incentive. It's like getting time added to your sentence for good behavior. Debt settlement

Creditor collection agents make their money by collecting the debts, not by reporting negative credit information, so are often willing to delete a negative listing upon settlement of your debt. If you are going to settle with a creditor, be sure to negotiate removal of the listing from your credit report. Collection agencies are usually more agreeable to deleting a negative listing than are banks or credit card issuers. Every creditor who reports to the credit bureaus can also change the information they report. In most credit organizations, there are dozens of people with the authority to make changes on the credit report. Anything a creditor reports, a creditor can change.

There are two ways you can approach deletion of negative information in response to settling a debt with a creditor: pre-notification of terms, and post-notification of terms.

Settling with Creditors - Pre-notification of Terms

In this scenario, you tell the creditor up-front that you require the deletion of the entire negative listing as a part of the payoff. Definitely obtain this agreement in writing before the payoff takes place. This way there is less chance that you will have to fight the creditor later to actually delete the negative listing.

Once you have concluded your negotiations with the creditor, you include a "conditional endorsement" document with your settlement check. This document, which should be drafted by your attorney, informs the creditor of your terms for settlement. In your case you will insist that you are settling the debt on the condition the creditor delete your negative listing. Most of the time you will get a more favourable settlement amount this way. The creditor is getting his payment and is satisfied enough by that alone, that they deposit the check without blinking at your terms. Debt mediation

Never expect a creditor to meet a verbal agreement. Document everything in writing, no matter how "good" you feel about the representative you speak to. You will likely have to fight the creditor to get them to live up to their end of the bargain, even when you have written documentation. You may find that some creditors refuse to agree to a deletion under any circumstance. Yet every creditor will eventually agree to your terms if you speak to the right person or hold off long enough.

Risks of debt consolidation

Be careful of what looks to be a quick fix. When interest rates are low, people are often tempted to take on additional debt to ease current money problems or cash flow, which gives you only symptomatic relief – not a cure for your debt load. In fact this would only make it worse. Taking on more debt when you are already in a bind will only land you in deeper trouble. Discipline is the catchword here with a consolidation loan. Cut up those credit cards and make sure you pay your bills first and “play” last. Debt consolidation

Debt Consolidation

Benefits of debt consolidation

• Replace multiple loan and credit card payments with a single monthly payment
• Reduce your overall monthly commitments
• Reduce rates on high interest credit cards, store cards, overdrafts or loans
• One affordable monthly payment
• Reduce your payments without affecting credit rating
• Fixed term – knowing exactly when your debts will be repaid

We can advise you on a range of options and will be able to recommend the right one for you, based on your circumstances. By discussing your monthly commitments and requirements we can find the right solution for consolidation of your debt. Call Finance Know How today!