Customers find it convenient to make a balloon payment, especially those who do seasonal jobs and expect strong cash flows before the loan term expires. However, if they are unable to make that payment then they might have to forgo the payment made in the past and return the product or look at refinancing by taking another loan.
Bill of sale Definition: A document that signifies that a person or organisation has sold goods to another person or customer is called bill of sale. It is regarded as a legal document and can be used as a valid proof in all legal matters.
It also signifies that the ownership of goods has been transferred to another party. Description: Bill of sale, in simple terms, means a document which can be used as a proof to signify a sale.
Just like when you go for shopping in a big retail store and you buy clothes, the retailer give you a slip or a bill which will have details of all the clothes that you bought along with their price.
A bill of sale is a sale document used for assets which are expensive such as automobiles. It is necessary that the party who is buying a car or any other asset should make sure that the bill of sale is complete and properly signed by both the parties.
It is used in a variety of transactions such as transfer of ownership of title of goods that people own, and for movable and tangible goods as well. It signifies two basic purposes —it confirms that the ownership of the property has been transferred to another person and serves as evidence in the court of law.
A bill of sale serves as a record of that particular sale to a customer. The most important document for you, as a seller, would be the bill of sale because it will have the information of the buyer, date when the car was sold, amount, etc.
Definition: When an organisation is unable to honour its financial obligations or make payment to its creditors, it files for bankruptcy. Description: Bankruptcy filing is a legal course undertaken by the company to free itself from debt obligations. Debts which are not paid to creditors in full are forgiven for the owners. Bankruptcy filing varies in different countries. In India if you file for bankruptcy it will not go down well with your credit rating, which means that it may be tough for you to get a new loan if you plan to start afresh.
However, it would save you from any financial trouble. In the United States there are three main chapters which are followed — Chapter 7, 11, and A person or an organisation files for Chapter 7 under the US bankruptcy law in which they liquidate their assets to repay their debt obligations.
Filing Chapter 7 means that all collection efforts from all creditors should be stopped at once. Chapter 11 under the US bankruptcy law means that a company will attempt to restructure their debts in order to pay the financial obligations. This particular bankruptcy code is for companies only and not for individuals. When companies are not profitable for extended periods, owners may be forced to go into bankruptcy to exit the market or reorganize the business.
While lack of profitability is the primary reason for most bankruptcies, many underlying factors can inhibit a company's ability to make profit and lead to bankruptcy. Poor conditions in overall economy and the specific market in which a business operates are common causes of bankruptcy.
The economy tends to follow a boom and bust cycle of rapid expansion followed by lulls or recessions. During bust periods, consumer confidence and spending tend to decline, which can lead to low revenue. Companies involved in specific niche markets can also be susceptible to shifts in consumer preferences. For example, a small business owner that owns a music store might be forced to close shop if customers start buying digital downloads instead of CDs.
Your Broker. The SEC. For example, a company declaring bankruptcy will file a form 8-K that tells where the case is pending and which chapter of bankruptcy was filed. You might also be able to get copies of SEC filings from your full-service stockbroker, or the company itself.
Bankruptcy Court. This court is usually located where the company has its main place of business or where the company is incorporated. There is at least one bankruptcy court in each state and the District of Columbia. Once you know a company's main place of business or state of incorporation, you can obtain the address and phone number of the bankruptcy court for that region by visiting the website of the Office of the United States Courts or by calling Court addresses and phone numbers are also listed in the publication, The American Bench, which you can find at your local library.
In addition, you'll find links to U. Bankruptcy Court websites at www. Trustee at the Department of Justice. Trustee has broad administrative responsibilities in bankruptcy cases. Check the U. Trustee's website , your local telephone book, or the public library for the field office closest to you, and contact them for information on the status of the bankruptcy. A Securities or Bankruptcy Attorney. If you suspect fraud, you should also report it to the SEC or your state securities regulator.
For a more detailed discussion of different types of bankruptcy, please read Bankruptcy Basics , which the Bankruptcy Division of the Administrative Office of the United States Courts produced to assist the public in understanding bankruptcy. Search SEC. Securities and Exchange Commission. Investor Publications. What Every Investor Should Know Corporate Bankruptcy What happens when a public company files for protection under the federal bankruptcy laws?
What Happens to the Company? How Are Assets Divided in Bankruptcy? Secured Creditors - often a bank, is paid first. Unsecured Creditors - such as banks, suppliers, and bondholders, have the next claim. Stockholders - owners of the company, have the last claim on assets and may not receive anything if the Secured and Unsecured Creditors' claims are not fully repaid.
Why Would a Company Choose Chapter 11? How Does Chapter 11 Work? Who Develops the Reorganization Plan for the Company? One committee that must be formed is called the "official committee of unsecured creditors. The "indenture trustee," often a bank hired by the company when it originally issued a bond, may sit on the committee.
Trustee Program. Although it may not feel like it at the time, the ultimate goal of business bankruptcy is to help you find financial stability once again. The Chapter 7 business bankruptcy process is fairly straightforward: The trustee is responsible for redistributing the assets to the creditors and overseeing the liquidation process.
They run meetings between all the parties and ensure fair distribution. Chapter 11 is a bit more complicated as a reorganization plan must be developed and approved. In this case, the trustee will negotiate a reorganization or liquidation plan with you.
Typically, you are given the chance to present a plan first; if the court finds it fair and legal under the Bankruptcy Code, the reorganization will proceed. If not, negotiations begin. You can also allow the creditors to propose a plan.
This process will run more smoothly if a plan can be made that stockholders, bondholders and creditors agree to; however, the courts have the final say. You can take the opportunity to reexamine your business plan and ensure your refreshed business is innovative and talkably different. Bondholders are next, but they may only receive a small amount of what they paid.
Stockholders are not protected by federal business bankruptcy law. By purchasing stocks and becoming part owners, they knowingly assumed risk and took the chance to become rich or lose money.
Publicly traded companies will be taken off the Nasdaq and New York Stock Exchange and, in the case of Chapter 7, stocks will lose all their value.
Chapter 13 works much the same way as Chapter 11 business bankruptcy, but because the company is a sole proprietorship, there are no negotiations needed with stakeholders. You must then pay back any creditors, but since there are no bondholders or stockholders and the debt limit is lower, the payback process only takes three to five years.
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