Debt Consolidation: Is Like Buying Cheap Money?

By Miguel Pancardo

The debt consolidation business is based in borrowing money from one lender to pay off outstanding debts with a better interest rates, one of the advantages of this process is that it starts to have one single debtor to whom will manage the monthly payments to the previous lenders.

Important steps to consider if interested in the debt consolidation process:

* Add the total amount you owe from every account you are interested in consolidate, you do this in order to know the total amount you owe. * Make a list of interest rates with each of your accounts, and calculate the average from all. * Start contacting your creditors (telephone, mail) and ask them the cancellation of the cash balances as of the date it intends to consolidate debts. * The entire amount of their balances of cancellation should be the initial amount to start the consolidation. * When looking for a lender, the rate you need to look for should be lower than average in the previous calculation. * Always be extremely careful about the terms of the loan; plan accordingly. * Once you have consolidated your debts control your finance and avoid getting in the same problem. The previous considerations applies to individuals living in countries that accept what is called the "Toronto terms", this name comes from the agreement established in the World Economic Summit in Toronto in June1988. They were applied to the countries designated by the World Bank as "IDA-only" these criteria apply to people who have a very heavy debt, low per capital income and problems paying back their balances. The countries that can apply these measurements should have the next characteristic: A strong structural adjustment program that has been approved and supported by the IMF (International Monetary Fund).

The fundamental principles of the Toronto terms are concessional terms for the debts of the Development Assistance and the introduction of a menu of conditions for payment of the debt that is not development assistance.

The debt of the ODA have two main characteristics a maturity of 25 years and 14 years of extension, the initial rate will be higher than the default interest rate. Debts different than the Development Assistance ones, the creditors can choose from a menu of 3 payment terms.

The first option is: the third part of the total amount of debt will be cancelled and returned in the first 14 years (that is the maturity date) there is an 8 years extension, nevertheless in case of default; these interest rates will be defined by the market.

Option B: repayment in 25 years with 14 years of extension and default interest will be marked by the market.

Last option: The same than the first option (option A) but here the default rates is 3.5 percentage points below the market rate (depending on further reductions)

On December 1991 the Paris Club agree to add some concessions for the countries with lower incomes plus the terms defined at the Toronto agreement that there are essentially 2 options to reduce debt, plus the option non concessional new conditions of Toronto. The option represents a 50% concession of forgiveness in present value terms in debt service payments, lowering the debt during the consolidation period. Additionally, it was agreed to establish a timetable for consideration of a potential debt reduction. Creditors have indicated willingness to consider restructuring the remaining time when the debt is cancelled on a date not later than 3 or 4 years.

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The Debt Collection Agency-why and how you need professional help with your business

By Britt Murphy

Due to increasing concern over bad debts, businesses the world over are turning to debt collection agencies to seek help in dealing with the issue. Collection agencies will not only be an efficient solution to your problem, but you can be sure that they conduct themselves professionally, allowing you to focus on your business. Keep reading to find out more information. There are greater requirements for professionalism and specialization in dealing efficiently with the multiple facets of businesses; as business operations grow more complex every day. As with such scenarios, recurring problems such as bad debts can make for larger problems for a business.

Debtors are a problem that all businesses have to deal with at some point or another. But, if more bad debts pile up, a business can suffer great loss. Being able to handle such situations requires more than just time and effort but the experience that comes with years of doing the task at hand. Businesses do not have much time or specialization to deal with bad debts. What's more, it is not uncommon to have some certain debtors who are not otherwise reachable by phone or email.

Trying to track down and contact these debtors is difficult and a waste of time and you really need to work with a professional collections agency that will take care of all the heavy lifting for you, letting you focus on your life. How come collection agencies can effectively collect the debts that are owed? Because collecting debts is the main task involved within a collection agency; they spend a great deal more time than you have available in order to work on delayed accounts. In dealing with the problem, their approaches are unique due to their specialization and experience. Maintaining professional ethics throughout the process, debt collectors work diligently to retrieve missed payments without creating furthering difficulties.

This type of professional acumen and attitude is quite significant in debt collection, as while there's the desire for getting paid, you frequently don't desire to damage the commercial interaction with those who owe you, as they are needed in this realm of commerce. That is yet another good reason to consider professional help when trying to collect on your debts as opposed to trying to do it yourself. Notification letters called demand letters are one of the first actions a collection agency uses to open negotiations in a timely manner. The one owing money is contacted personally if he or she doesn't answer the letters that have been sent within the set time period. The debtor generally responds better to a direct contact rather than being called by a collection agency.

Secondly, options to make payment by using negotiation can be allowed for the debtor. With your consent, legal action can be taken against a debtor by the debt collection agency as a final resort in the case of none response. You only take legal actions when all other routes have failed. With all the effort put into minimizing your debts, it's hard not to pay them down. Companies across the globe utilize the services of collection agencies to quickly accrue their money. For a business in Canada, a well-organized collections organization Canada can propose the right resolution, as it understands the laws of the place.

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Report from Jennifer Frederick author at http://www.bestonlinefastloans.com.

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