If your bank account regularly goes over your arranged overdraft limit, you will have to pay extra interest and charges. Your bank could also cancel your overdraft limit or refuse to renew it when your agreement runs out. If you lose control of your bank account, it can become very difficult to manage your business and household finances.

Unpaid cheques, direct debits and standing orders will make your debt problem worse and any money paid into your bank account may be taken up by interest and bank charges instead of covering payments you need to make. You may find it easier to change your overdraft into a loan. Remember, you may lose your overdraft as the bank will often make it a condition of the loan that you keep your current account in credit. You will also be committed to making payments towards the loan each month. Make sure you can afford this and make sure the interest rate on your new loan is no higher than the overdraft rate was.

Leases for hiring equipment may be priority or secondary debts, depending on your circumstances.

Check the agreement very carefully to see whether:

• you have the right to keep the equipment at the end of the lease; and

• if you will have to pay for the equipment for all of the period set out in the agreement whether you return it or not.

Under lease-hire agreements, the company which supplied the goods will always own the goods and will be responsible for repairs. Under lease-purchase agreements, if you pay a fee at the end of the leasing period, you will then own the equipment. Check with the leasing company if they will reduce your debt if you return the equipment. If you have the right to keep the equipment, or if you need the equipment to keep trading, you should treat the missed payments as a priority debt.

we present analysis of individual-level data from one large payday lender that begins to explain how astronomical loan interest rates can coexist with more pedestrian firm-level return on equity.

The individual data reveal that loans are small, yielding interest payments of only $49 on average; loss ratios of about 5% per loan immediately consume over 1=4 of interest income; and net financial returns interest payments less loan defaults amount in expectation over all of the marginal borrower’s loans to only about $100.

These data are consistent with the interpretation that payday lenders in a competitive market face per-loan and per-store fixed costs that are large relative to the interest earnings on their small loans. Third, we contextualize our findings in relation to a small but excellent and rapidly growing literature on the supply side of the payday loan industry.

If the council have tried to use bailiffs, and you have still not paid your business rates in full, they may apply to the magistrates’ court for an order for you to be sent to prison (‘committal’).If you have not paid because you don’t have enough money, the court is not likely to send you to prison. The court would have to show either:

• you have deliberately refused to pay (known as ‘wilful refusal’); or

• you could afford to pay but did not (known as ‘culpable neglect’).

You must go to the hearing and show the court your business and household budget to explain why you have not been able to pay.Take along any evidence to show you have tried to pay what you could afford.

If you are on a low income, you may be able to claim Working Tax Credit on top of your wages. Many self-employed people do not realise they can claim tax credits.You can qualify in the following ways.

• If you (or your partner) are employed or self-employed for more than 16 hours a week and are bringing up one child or more. If you qualify for this reason, the tax credit can also help with childcare costs in certain circumstances.

• If you (or your partner) are employed or self-employed for more than 16 hours a week and have a disability that puts you at a disadvantage in getting a job.

• If you or your partner started work (including self-employed work) in the last three months and are:

– over 25 and work for 30 hours or more a week; or

– over 50 and work for 16 hours or more.

In both cases, you must have received Income Support, Jobseeker’s Allowance or Incapacity Benefit within the last six months.

Working Tax Credit will usually be paid into your bank account, and is dealt with by HM Revenue & Customs.

If someone owes you money and they are not paying you, you should speak to them to try to work out a solution.

This may include:

• arranging for them to pay you in instalments; or

• coming to an agreement if they are not paying the debt because they have a dispute with you about the invoice or the goods or services they have bought. If the person is only disputing part of an invoice, you should ask them to pay the part they are not disputing immediately and then sort out the rest separately. Be careful not to harass the person who owes you.

If a business owes you money, you may have the right to claim statutory interest (interest at a set rate) from them. If you cannot recover the debt by speaking to the person or company direct, you may be able to take court action (either by yourself or through a solicitor) or use a debt-collection agency to get the money back. You will need to balance the costs of taking any formal action against how much you would get back, particularly if the company has a reason for not paying or cannot afford to pay. Make sure you have a good

credit-control system (a system for managing money owed to your business) as this can considerably  reduce the problems of late payment and bad debts.

If your business does not have yearly sales that add up to the registration level shown on the tax sheet, you do not need to be registered for VAT. If you are already registered for VAT and you want to be demoted from the register, you will need to show that your turnover will be less than the de-registration level (shown on the tax sheet) over the next 12 months. You could use your budget sheet to show this.

You must pay VAT on all of your sales, unless the sales do not qualify for VAT (known as ‘zero rated’) or are exempt. The tax paid on goods and services you have bought (shown on the invoices) is your input tax and the tax on your sales is your output tax. If you have bought more than you have sold, or your sales are zero-rated, your input tax will be more than your output tax and you will get the difference paid back as a refund.

You have to send VAT returns every three months (every quarter).The date on invoices you send or receive is known as the ‘tax point’, and this usually helps you to decide which return you should include them in. However, you may apply to your local VAT office to account only for the tax you have  actually received. This is called ‘cash accounting’. You can also get back the tax you have paid on debts a person or company is failing to pay you, instead of waiting for the person or company to go bankrupt or go into liquidation (this is when a company stops trading and its assets are sold and split up equally between its creditors

Why are you interested in these loans? What would you do with the money you would get from one? Are the needs you intend to meet really worth the high cost of these loans? If you want to take that dream vacation, a reverse mortgage is a very expensive way to pay for it. Investing the money from these loans is an especially bad idea because the loan is highly likely to cost more than you could safely earn. If anyone is trying to sell you something and recommending you use a reverse mortgage to pay for it, that’s generally a good sign that you don’t need it and shouldn’t be buying it. Be especially wary if you don’t fully understand what they are selling or aren’t certain that you need it.

Mortgage foreclosure frauds: Thieves may contact homeowners at risk of losing their home to foreclosure and propose to help by “paying your mortgage” while you temporarily “rent” your home from them. They then trick you into signing documents that transfer the ownership of the property to the crooks. In other scams, phony companies claiming to be housing counsellors offer to negotiate a new loan or perform other services for very high upfront fees and do little or nothing in return.

Credit card fraud: Identity thieves steal personal information and apply for new credit cards or make counterfeit cards. Under federal law, if a thief uses your credit card or card number the most you are liable for is $50. Even so, ID theft in general can be costly to fix, and it can take months to repair the damage. Notify your card issuer about any problems as soon as possible to help limit your losses. How can you avoid credit-related fraud or deception in general? “Deal with financial institutions or other companies you know or that you have independently verified as being legitimate,” explained Randall Howe, a fraud specialist at the FDIC. When

in doubt, he said, you may contact the FDIC for guidance (see the back page) or call your state or county’s consumer protection office.

As for preventing credit card fraud, safeguard your personal and financial information and monitor your credit card statements and credit reports for signs that a thief has stolen your identity.

Student loan consolidation is combining several loans into one with a new repayment term and interest rate. This is generally offered in connection with federal loans. Here’s how to help identify potential problems related to loan consolidation:

Avoid lenders and marketers who use high-pressure sales tactics. Some marketers pitch that “your interest rates may go up if you do not consolidate immediately!” Whether and when interest rates for consolidating your loans will change depends on what type of loans you have. Look at your loan documents to determine whether the interest rates are fixed or variable:

— If all of your education loans have fixed interest rates, there may be no deadline to consolidate.
— If some or all of your loans have variable interest rates, when you consolidate into a fixed loan it may affect the interest rate of your loan.

ED publishes new variable rates for some federal loans each July 1st. The annual rate changes can raise or lower the interest rate offered on a consolidated loan because the consolidation interest rate will be the weighted average of all loans consolidated.

Whether or not you have a targeted timeframe, take your time to determine whether consolidating is right for you.