|
If you, having wound-up your business, have unsettled bank debt, not only
you, but your banker as well, have a problem.
Protection of indigents
Your banker is allowed to demand you to sell your house if you own one, or
your car. In some countries there are limits to how much of your house contents
banks (and other creditors) can demand you to sell.
The law offers some protection against creditors on a debtor´s inability to
settle his/her debt.
Contact a lawyer for further information.
|
Subway maps: |
|
Understand Basic Accountancy
|
Financial management |
|
|
 |
Limitation
However, you will have to live with an indefinite period of limitation.
Indeed, debt contracted without "particular legal basis" (e.g. general
trade debt) expires in some countries after 5 years, but if you have unsettled
bank debt, your banker will always take measures in order for the debt to
subsist for 20 years.
And all it takes for the banker to prolong the 20 years´ period of
limitation is a letter to the debtor pointing out that the debt still exists.
Arrangement for debt repayment
Being stuck with bank debt is a severe constrainer of your financial scope
for action. For one thing, you are unable to acquire real property and generally
to purchase property such as a car, until the debt has been fully repaid.
So if you are boundlessly indebted to your banker after having wound-up your
business, you should contact them for an arrangement. In some cases the banker
will agree to a reduction of the debt against payment of a fixed amount.
Such an arrangement is based on the banker´s estimation of whether or not you
will be able to eventually settle the full debt.
Such arrangements are usually made with a lawyer as intermediary.
Debt relief
If you are up to the ears in debt to the banker and/or other creditors, you
may be entitled to debt relief.
Debt relief is a grant by bankruptcy court for reduction of your debt to an
amount within your capacity to repay.
However, debt relief is not something you get "just like that".
Stringent requirements must be met and many applications for debt relief are
turned down.
If you are in a situation where debt relief may be your only way out, you
should consult a lawyer or your local bankruptcy court.
- Go to next
business issue: Accountability and Management
Download free templates
- Download templates to help your start-up
Copyright © 2009 Dynamic Business Plan 05-02-2012
|
