debtor

Examples of debtor in the following topics:

• Striking Agreements to Avoid Bankruptcy

  • In general, creditors understand that bankruptcy is an option for debtors with excessive debt.
  • Negotiation is a viable alternative if the debtor has sufficient income, or has assets that can be liquidated so the proceeds can be applied against the debt.
  • Negotiation may also buy the debtor some time to rebuild finances.
  • By consolidating debts, the debtor replaces payments to many different creditors with a payment to one creditor.
  • This simplifies the debtor's obligations and can result in faster debt repayment.

• What Happens in Bankruptcy

  • Bankruptcy allows debtors to either reorganize and restructure debts or liquidate assets to be used to pay off creditors.
  • In voluntary bankruptcy cases, which account for the overwhelming majority filed, debtors petition the bankruptcy court.
  • In other words, as soon as a petition is filed, a debtor is entitled to all the provisions of the Bankruptcy Code.
  • Under Chapter 7, a trustee collects the non-exempt property of the debtor, sells it, and distributes the proceeds to the creditors.
  • Chapter 12 generally has more generous terms for debtors than a comparable Chapter 13 case would have available.

• Identifying Varying Conditions

  • Management uses policies and techniques for the management of working capital such as cash, inventory, debtors and short term financing.
  • The policies aim at managing the current assets (generally cash and cash equivalents, inventories and debtors) and the short-term financing, such that cash flows and returns are acceptable.
  • The inventory is ideally financed by credit granted by the supplier; however, it may be necessary to utilize a bank loan (or overdraft), or to "convert debtors to cash" through "factoring. "

• Loans and Loan Amortization

  • In order to pay off a loan, the debtor must pay off not only the principal but also the interest.
  • After all, if the debtor had enough money and liquidity to pay off the loan instantly, s/he wouldn't have needed the loan.
  • In order to figure out how much to pay off to amortize each month, many lenders offer their debtors an amortization schedule.

• Annuities

  • The third reason why banks like to make annuity loans is that it helps them monitor the financial health of the debtor.
  • If the debtor starts missing payments, the bank knows right away that there is a problem, and they could potentially amend the loan to make it better for both parties.
  • Similar advantages apply to the debtor.

• Bankruptcy Considerations

  • In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor.
  • Generally, a debtor declares bankruptcy to obtain relief from debt.
  • Usually, when a debtor files a voluntary petition, his or her bankruptcy case commences.

• Financial Management Before and During Bankruptcy

  • If the situation is too dire for such measures and a debtor does not expect to have steady income or property, it may be appropriate to utilize the take no action approach.
  • In other words, the debtor should do nothing since a company with no assets or income cannot undergo garnishment by a creditor.
  • Under this plan, a debtor may be able to acquire financing and loans on favorable terms by giving new lenders first priority on the business' earnings.
  • The court may also permit debtors to reject and cancel contracts previously agreed to, if this would be financially favorable to the company and its creditors.

• Evaluating Interest Rates

  • Thus, working capital policies aim at managing the current assets (generally cash and cash equivalents, inventories and debtors) and the short term financing, such that cash flows and returns are acceptable.
  • Decision criteria that focus on interest rates include debtors management and short-term financing.
  • Debtors management involves identifying the appropriate credit policy -- i.e. credit terms which will attract customers -- such that any impact on cash flows and the cash conversion cycle will be offset by increased revenue and, hence, return on capital (or vice versa).
  • For instance, inventory is ideally financed by credit granted by the supplier; however, it may be necessary to utilize a bank loan or to "convert debtors to cash.".

• Debt

  • A debt is an obligation owed by one party (the debtor) to a second party (the creditor).
  • A debt is an obligation owed by one party (the debtor) to a second party (the creditor).
  • Debt usually refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.
  • A debt is created when a creditor agrees to lend a sum of assets to a debtor.

• Bankruptcy and Bond Value

  • In Chapter 11, in most instances, the debtor remains in control of its business operations as a debtor in possession, and is subject to the oversight and jurisdiction of the court.