Chapter 7 bankruptcy, also known as liquidation bankruptcy, is designed for individuals and businesses with limited assets and income who are unable to repay their debts. Under Chapter 7, a trustee is appointed to liquidate the debtor’s non-exempt assets and distribute the proceeds to creditors. Most unsecured debts, such as credit card debt and medical bills, are discharged in a Chapter 7 bankruptcy, which means the debtor is no longer responsible for paying them.
Chapter 11 bankruptcy, on the other hand, is a type of reorganization bankruptcy primarily intended for businesses but can be used by individuals as well. It allows the debtor to restructure their debts and operations under court supervision while continuing to operate their business. This allows the debtor to continue earning income and paying creditors over time, rather than having to liquidate assets immediately. Chapter 11 is a more complex and expensive process than Chapter 7, and it requires the debtor to submit a reorganization plan to the court for approval.
In summary, Chapter 7 bankruptcy is for individuals and businesses who need to liquidate assets to repay creditors, while Chapter 11 bankruptcy is for businesses and individuals who want to reorganize their debts and operations under court supervision while continuing to operate their business.
Inflation can have a significant impact on a company’s accounts receivables, which are the amounts owed to the company by its customers for goods or services that have been delivered but not yet paid for.
The impact of inflation on accounts receivables depends on the terms of the sale agreement between the company and its customers. If the company has contracts with fixed prices, inflation can erode the value of the receivables over time. For example, if a company sold goods for $1,000 with payment due in 60 days and inflation is 5% per year, the value of the receivable in today’s dollars would be reduced to $952.38 after one year.
On the other hand, if the company has contracts with variable prices, such as contracts that include inflation-adjustment clauses, the impact of inflation on accounts receivables may be mitigated. In this case, the price of the goods or services sold would be adjusted for inflation, which would help to maintain the real value of the receivables.
In summary, inflation can impact a company’s accounts receivables by reducing the real value of fixed-price receivables over time, while variable-price receivables with inflation-adjustment clauses may be less affected by inflation.
We are entering a crucial stage of the year for corporate debt collections. Some organizations are closing their year at the end of June and pushing for cash. Collecting your over 90 aged receivables is vital as your organization is looking to meet year-end cash collection targets.
Global Hawk Resources is strictly measured on how much we collect and pass back to our customers minus cents on the dollar. Your organization needs cash on hand to meet financial obligations and we are here to execute that process. Creating an escalation workflow from both an internal and external standpoint cannot be overstated. Utilizing collection tools and analyzing weekly aging reports will highlight problem areas in your AR that need to be addressed and resolved. It is a critical time of year to clean up your over 90 aged balances and we are here as a resource.
Due to the tight connection between major economies of the world, economic problems spread quickly globally. If economic problems are large enough to bring down major countries’ gross domestic product (GDP), it results in a global recession.
The leading indicator of where we are going economically is the world’s financial markets, like our stock market. The market, if you have not noticed, is all over the place.
Two actions to take in credit immediately:
Collect all dollars that you have been carrying for the past 1-2 years of covid. You are not alone in this, almost every company has been holding this too long.
It is imperative that you place this debt with your outsourced collection agency now while customers have money to pay. Take settlements, let your agency negotiate, then move quickly. If you keep ignoring your aged accounts, you could find yourself out of business and unemployed.
Cut back on extending credit. We are seeing businesses extend credit every week to phantom companies. Fraud is higher than we have ever seen in our combined 40 years in the credit industry. This kind of information doesn’t hit the news and no charges are filed against such unlawful acts because of the embarrassment it will cause the large companies who are committing them.
2021 is rapidly coming to a close. As the year wraps up the Global Hawk Resources team would like to remind all finance professionals of our long list of offerings in the billing and debt recovery commercial space:
* Recovery of Disputed Over 60 days past due balances
* 1st party Collection Program to manage the entire AR portfolio from current to over 90 day past due terms
* Reclamation of unpaid goods
* Resolution of Double Payments resulting in valid refunds to your finance department
* Assistance with invoicing your customers from your billing software
* Legal Forwarding of Claims not resolved in adjustment that need suit filed
* Skip Tracing to Determine Proper Contacts to present past due items for payment
* Dunning Letter Writing Series
* Designing a Collection Program to push for 2021 year-end cash and/or beginning of 2022 cash collection targets
We wish you all Happy Holiday Season and New Year!!
GHR continually supports Socratic Inc. Our own CEO, Gene Castello sits on the board of this amazing non-profit organization. Socratic Inc is about giving back to less privileged high school individuals who are in need of support during their first year of college. Last Friday evening, at their annual fundraising event, Socratic Inc reached their fundraising goal.
More than 200 guests enjoyed a dinner coupled with a wonderful evening of networking, raffles and music that was hosted at Salvatore’s Restaurant at Riverwalk in Lawrence, Massachusetts. Proceeds collected at this amazing annual fundraising event go to the Steven and Maureen Kelly Scholarship Fund that Socratic Inc awards annually to kids in the Merrimack Valley in partnership with the Boys and Girls Club of Lawrence Massachusetts.
Boys and Girls Club Associate Director, Steve Kelly, who has 55 years of service at the Boys and Girls Club of Lawrence, was the honorary speaker.
Find out more about Socratic Inc here. Click here to donate.
Global Hawk Resources is happy to announce that our agency now accepts credit cards. This addition to our business services has enabled our agency to collect more successfully for our customers.
Infection rates dictate everything right now with economists watching real time data and projecting. The US economy dropped 40% with Covid. As of last week, we are back to only a 20% drop in the economy. That is a major shift, but we are still down roughly 20%.
Where are we heading and how fast?
Looking at purchase indicators from business on what businesses are buying and at what speed helps us with a 6 month predictor of where we are heading.
These numbers have been positive.
How people are feeling about spending is the largest indicator button here. This is called sentiment data. Sentiment data is showing through (Blomberg Nanos Consumer Index) that savings rates have spiked all over Western Europe, the US and Canada. It is important that we get a handle on sentiment spending because then we can foresee the flood of money coming out of savings and back into the economy all at once. This represents a very large volume of money in the world economy.
Employment and its lead time are additional factors. This time is defined as the time it takes to fill a position, from advertising for this position through the time of hire of a new individual. The numbers today are longer than they have ever been. This factors into sentiment spending as well as the point that folks do not spend money until they have secured a new job and feel confident with it.
The last indicator of where we are heading is the financial markets. We saw large shorting in the equity markets as we tumbled down. Now we are not seeing shorting of the markets. This is great news.
There is much optimism with the economy coming back and it is unclear as to exactly what the reasons are. Excess of liquidity, irrational exuberance and/ or quantitative easing (meaning how governments are controlling the monetary policy by lowering interest rates and/or dumping more money into the economy) it is hard to tell. The markets are trending upwards, and this is one of the major indicators of the return of a strong global economy.
The chill in the air reminds us that another school year is beginning. Winter will soon arrive and a return to business activities is upon us. With this return to business activities, what are the top economic factors? Covid infections are at the top of our list as a threat to economic recovery. Unfortunately, this is the biggest risk to business flows. The rise in the Delta variant infections threatens economic growth across almost every industry.
Global Hawk Resources strongly recommends to stay informed of infection rates in destination countries and supplier countries as well. The most important factor in the United States is state level actives. Broad lockdowns are not expected to be the key strategy any longer, but rather a focus on vaccination rate in hopes of reducing infection levels.
The good news is the global economy is in fast recovery mode. The challenges lie in limited supplies and raw goods for manufacturing as we move forward into the winter months. Seaborn shipping will continue to struggle with overflows in shipping. Containers and vessels are still the main shortages in this area. There is enough capacity to align with current demands, however there remains a challenge to get back to pre-pandemic flow of goods. Inflations of the new Delta variant will be the main focus as they continue to rise. This of course is fueled by a limited amount of raw goods as we move into the autumn, pre-holiday retail season. Large players will use their clout to make sure orders are fulfilled while smaller players will need to be creative to make sure orders are met.
Unambiguously, this will result in higher prices for the end consumer. The United States consumer prices will shoot up, and Europe will follow suit. Another key factor to keep in mind is labor shortages. These shortages will continue to rise as unemployment numbers shrink, thus again hurting the smaller players. Labor now has better options on employment choice and will chose larger companies with more security and better benefits. A positive aspect during is the large amount of cash savings in many businesses due to low operating costs over the time period of the pandemic.
Businesses need to be aware that these factors are on the way. We need to stay ready. Meaning, we need to insure that cash flow is secure as it is the life blood of any business. One predicator is for sure, we don’t always know what is coming as we have seen over the past 2 years, however we can insure better success by perusing past due accounts and creating process that protect receivables.
Summer is officially over, and days are starting to get shorter as we enter the final four months of 2021. Collecting on your over 90 aged receivables is becoming more and more crucial as your organization is looking to meet year end cash collection goals. Global Hawk Resources is here to help. As a vendor, we are strictly measured on how much we collect and pass back to our customers minus cents on the dollar.
Critical Data to Help Collect Your Companies Delinquent Receivables
Current Accounts: $1.00
3-months Overdue: $.70
6-months Overdue: $.50
1-year Overdue: $.23
2-years Overdue: $.10
** Survey Results provided by the Commercial Collection Agency Association (CCAA)
Past due receivables can severely impact the trajectory of a business. To fight this uphill battle a company must instate a strict policy when dealing with delinquencies. Creating an escalation process from both an internal and external standpoint cannot be overstated. Utilizing collection tools and analyzing weekly aging reports will highlight problem areas in your AR that need to be addressed and resolved. Businesses must draw a line in the sand when dealing with aged balances and be aware that as these debts age they will become harder and harder to collect.
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Chapter 7 bankruptcy, also known as liquidation bankruptcy, is designed for individuals and businesses with limited assets and income who are unable to repay their debts. Under Chapter 7, a trustee is appointed to liquidate the debtor’s non-exempt assets and distribute the proceeds to creditors. Most unsecured debts, such as credit card debt and medical bills, are discharged in a Chapter 7 bankruptcy, which means the debtor is no longer responsible for paying them.
