Archive for December, 2018

The State is money

Sunday, December 30th, 2018

Santi Vila says that “for moderate people, beyond their own ideas and prejudices, the reality of the facts matters”. So far, ideas and prejudices have been imposed. The time for the facts has arrived. And the reality of this hectic week has been what I can describe. Monday, October 2: anxiety in Spain. Against the announcements of the central Government, there was a vote. The independence movement showed strength and won the battle of opinion in Europe. Tuesday, October 3: the King highlights the “extreme gravity” of the moment and urges the public powers to maintain constitutional order. They receive it with caceroladas in Catalonia and applause in the rest of Spain. Wednesday, October 4: Puigdemont tells the King “well no”. But the calls of businessmen who say to Puigdemont increase: “So not, that you take us to the precipice”. Thursday, October 5: Banc Sabadell, alarmed, moves his headquarters to Alicante. The bag rewards him, as he rewards the other companies that flee from Catalonia. Friday, October 6: The press reflects that the markets are dealing a serious blow to the independence movement. Santi Vila proposes a ceasefire and, if necessary, delay the DUI to set up two negotiating teams.

Additional annotations: article 155 loses strength. In his television appearances, Puigdemont (TV3) is seen decayed and Junqueras (“The Sixth”), disoriented. ANC and Òmnium freeze the protests, even if for caution before the National Court. The street sign changes, and there are hugs to the Police and Civil Guard where before there were rejections and signs of weakness of the State. Something changes. The State paid for its bulky errors and the separatism began to pay: abused the street siege, put fear in the social body and left the Govern with an image of submission to the radicals. Rajoy, following traditional custom, did not need to move from his speech: “Let them go back to legality.”

Who was the first to be alarmed? The money. Pela moved the Catalan board. For now, the social. The politician is in the hands of men like Vila. But know one thing: if Oryzon, Sabadell, CaixaBank and other companies had not punched the table, we would continue in the image of the absent state of Catalonia and the unstoppable progress of the separation. The passion of the moment is defined by a portrait: until now there was a fight between “the strength of the Spanish democracy” (Rajoy) and “the strength of the Catalan people” (Puigdemont). Now we are facing an old confrontation: markets against ballot boxes. In view of the evolution of the conflict, neither King, nor Government, nor courts, nor Constitution: the State is money.

In between, the proposal of Vila: truce to negotiate. It is the most positive exposed after 1-O. It only has two problems: the part of Spain that represents Alfonso Guerra and says that with coup plotters it is not negotiated and the part that Rajoy represents and says that before you have to go back to legality. And that could be understood as inviting surrender.

Dispo debts: accounts in minus

Saturday, December 29th, 2018

Image result for financial counseling

“Dispo” is the casual abbreviation for the disposition credit . This is granted by credit institutions in a checking account and offers a limited possibility to overdraw the account . More money will be withdrawn than is actually available on the checking account.

One of the characteristics of a disposable is that it can be used variably and without any special announcement . The credit limit is often two or three monthly salaries. The repayment of debit debts is irregular and possible in different amounts.

The resulting minus is pre-stretched by the bank. Such debit liabilities are usually associated with significant interest , which must be repaid by the account holder together with the actual debt .

Since the reimbursement of the pay packet by the cashless salary payment in the late 1950s, credit institutions generally allow the overdraft, if the credit line in reasonable relation to wages and salary .

Disadvantage of the Dispo: High lending rates

Dispo debts are not granted by a bank without corresponding consideration. Therefore, the use of a credit line is usually associated with so-called debit interest , which are calculated by the day. In addition, overdraft interest may accrue if the specified credit limit is exceeded.

The interest that accrues from existing disbursement debts is relatively high compared to other forms of interest. In 2015, they averaged 10.25 percent . However, as they are not prescribed by law, dispo interest rates fluctuate a lot.

Normally, the daily borrowing rates range from just under five percent up to 15 percent . Overdraft interest on exceeding the credit limit is often a few percentage points higher.

Termination of the disposition credit

The disposition can be terminated by the bank in most cases without notice . However, this usually requires an important reason . This can for example at

  • Deterioration of the assets of the Account Owner or
  • Initiation of foreclosure against the owner consist. The case of a termination is often particularly explosive for the account holder, because all debit debts are then due in one fell swoop .

As a rule, however, the system is used up because the account holder has to overcome a financial bottleneck . Therefore, the immediate payment of unregistered debt puts borrowers often in an emergency, also with the depending on the amount of debt personal bankruptcy may end.

Reduce disposition debt: How is this possible?

For many debtors, the Dispo is therefore a debt trap , also because it make the high interest rates more difficult to settle the liability. In order not to let that happen, this type of credit should never be used over a longer period of time , but only available for emergencies . Next month, the account balance should be back in positive territory.

But what can bank account holders do when it becomes apparent that the data collection must be used permanently or more frequently ? What should be done if there are already sizeable debit debts ?

Use savings

The interest on syndicated debts is usually higher than any interest rate on savings on other accounts , such as money market accounts. Consequently, it makes sense, if possible, to use existing cash deposits to pay off the debit .

Similarly, it may be useful to ask family or friends to pay the debit debt and owe the sum instead of the bank – without high lending rates . Anyone who sees a way to partially or completely save other expenses may also be able to compensate for smaller collection fees.

Remortgage: installment loan

Another way to reduce the disposition debt, may be a debt restructuring . Usually a installment loan is equipped with less high interest rates . In addition, there is an obligation to meet a monthly due date, which helps many debtors to pay off the loan through regular installments . In addition, the installment loan is set for a specific period of time and can not be terminated easily.

Therefore, before this step, it is important to compare monthly expenditures and revenues, and on this basis, to agree on a realistic installment amount with the creditor , which can be borne by the debtor over a longer period of time. The credit itself should not be too high . As a rule, a slightly higher loan amount is sufficient, as debit-side debts have been incurred in order to pay the first installment of the new loan.

However, debt rescheduling by installment loan requires that debtors no longer use the interdispensing loan . Otherwise, the debt rescheduling can only lead deeper into the debt trap.

Alternative: call credit

A call credit is similar to a Dispo, but is much cheaper. A bank will, upon request, provide a loan in a certain financial framework , which may be used as needed . Interest only accrues on the amount actually used. The eradication is often individually selectable. Some banks only charge interest rates monthly, others a low rate.

But even here is true : who despite debt rescheduling continues to use his Dispo and accumulates debts or agreed too high a call-off loan, the debt trap does not escape , but slips even deeper!

Help with high collection debts

If the collection debts continue to increase or insolvency occurs , debtors should seek professional help . This can be, for example, state or non-profit debt counseling . The consumer centers of the federal states can also give initial impulses and refer to suitable advice centers.

Make sure that the chosen debt counseling agency can issue certificates for the failure of an out-of-court settlement attempt according to § 305 of the Insolvency Act (InsO). Because if it should come to the private bankruptcy due to the debit debt, the insolvency proceedings can only be opened with such a certificate.

In addition to free debt counseling, a legally trained debt counselor can be useful. An insolvency lawyer is not only familiar with the requirements of debt settlement and consumer insolvency proceedings , he can also legally negotiate with creditors and banks.