The quick and dirty definition of bankruptcy is when a person who is unable to pay their debt goes to court seeking relief. If you are the petitioner, the court must determine if your debts are truly beyond your ability to pay. Then, depending on your case, either the court discharges the bulk of your debt or sets up a payment schedule that is in your best interests but does not entirely absolve you of the responsibility of paying your creditors.
While that might be a simplified explanation of bankruptcy, it is one of the most complicated consumer legal issues you might encounter. Part of the complexity is due to the regulations, the fact that there are different types of bankruptcy petitions, and the process to administer the petition within the court system.
The other aspect that cannot be ignored is the negative stigma attached to bankruptcy. You have not owned up to your debt, you are trying to cheat your creditors out of money, etc. It is true that some people are looking for an easy way out to not pay their bills, but the fact of the matter is that bankruptcy is a legitimate legal proceeding to reorganize your debt.
In order to decide whether bankruptcy is the right course of action, the first thing you need to do is separate the emotional response from the financial response. Then go consult with a lawyer. Bankruptcy law changed significantly last year, and your first and best source of information is always going to be someone who is aware of the legal ramifications and, in fact, whether or not bankruptcy is the best financial choice in your situation.
Credit Cards
Unless your credit cards are paid off in full before you file, chances are you will not be able to use them again after you file (and even then, the creditor may cancel the credit card.) This is not a call to action to charge up your cards the month before you file. For one, the courts may recognize that as bad faith and order you to pay those recent charges in full instead of discharging them. Two, the act of bankruptcy is intended to give you the means to show more financial responsibility and charging your cards to the max is rarely a sign of responsible spending.
However, your credit card companies will stop collection calls on your delinquent credit card accounts, and your attorney can handle all the contact with credit agencies. This is one of the most powerful benefits of a bankruptcy: the “automatic stay.” This means that all attempts to collect all debts by all entities must immediately cease.
Other Types of Debt
If you have foreclosures or garnishments, the collection actions on those will stop as well. Secured debt, i.e. mortgages and car payments, cannot be eliminated through bankruptcy. The debtor has the choice of catching up on arrears and continuing to make payments, surrendering the collateral and owing nothing, or “redeeming” the collateral with a lump sum payment of the balance due or current value, whichever is less. If reading that is already overwhelming, just know that secured debt is still your debt after you file.
In the immediate future, your credit will take a severe hit, so the likelihood that are you are extended credit after you file is slim. That does not extend indefinitely into the future. The point of bankruptcy is also to give you a chance to rebuild your credit, and sooner than you expect, you might be eligible for some forms of credit. Although something large like a mortgage on a home will probably be five years or more away.
You should also be aware that there are certain types of debt that will not be wiped clean no matter your situation. You will almost always owe on student loan payments, even in bankruptcy, as well as back taxes from the last few years. Child support and alimony are two other types of debt that you will continue to owe.
Public Disclosure of Debt
If embarrassment is your main concern, then you should know that most court proceedings are public record, can be researched by just about anyone, and in some cases, the information about your claim will show up in newspapers. Public disclosure is part of the legal process, and it should not stop of you from declaring bankruptcy if it is a sound financial decision.
A report of bankruptcy does stay on your credit report for ten years. It stays that long to discourage people who are only filing to get out of obligations they never intended to pay to begin with. Though it is possible to file multiple bankruptcies in a lifetime, for most individuals, one time should be sufficient to get you back on track financially.
The Next Step
The two most common petitions for individuals are Chapter 7 bankruptcy and Chapter 13. This is where a conversation with a lawyer is critical so that you can understand the differences between the two and get information on your eligibility for Chapter 7. The 2005 Bankruptcy Reform made it more difficult for individuals to qualify for Chapter 7 bankruptcy.
In general, Chapter 7 discharges the bulk of your debt (the exceptions were mentioned earlier) and Chapter 13 is essentially a court ordered payment plan to handle your debt. There is a court supplied formula that determines what the monthly payment should be in Chapter 13. It is based on the income and expenses of the debtor. If the plan is approved, after 60 months of steady payments whatever remains unpaid is discharged.
If you are overwhelmed by your debt, then the best thing to do is think carefully about the ramifications of filing for bankruptcy. First, separate the financial and emotional issues, and have a conversation about each separately. It is important to talk to someone who is familiar with bankruptcy law, and advisable to seek out a lawyer in any case to address the financial implications.
Andrew Marx uses his legal education to provide practical information on how the everyday person can access legal resources. His weekly column can be read at smartremarx.com/ smartremarx.com/
Payday loans are there to be available when you need them. If you run into trouble, your car needs an immediate repair or a bill comes in that you were not expecting, trying to get hold of money fast can be rather embarrassing and also frustrating. With a payday loan you can avoid the hassle of having to ask friends or family to borrow money or for a loan. When you apply for a payday loan, once approved you will receive the money on the same day, which is great when you really need the cash fast. You can actually have the cash within an hour so that you have it right away to pay the bill or debt that needs paying right away.
The downside to payday loans is that the fee charged is really quite high. Everybody knows that the fee is going to be high, this is why the money is so readily available. The fee is normally in the region of $15-$30 per $100 borrowed. Even though some people are embarrassed or ashamed to apply for a payday loan, these types of loans are becoming more and more popular. They are easier to get than a regular personal loan and also the money is available fast, normally within hours it is in your bank account. Payday loans do not always have to be used for paying a bill that needs to be urgently paid, or fixing a car that needs to be fixed. The money can be used for anything that you want to use it for. If you, for example, get paid once a month and then a week before you are due to be paid again you are invited away for the weekend with a group of friends, you may not be able to afford it but you still may want to go.
Asking your friends to lend you some money may be too embarrassing to do, but a payday loan would be the ideal solution in this situation. You must be careful not to fall into the trap of using a payday loan each month as it could become increasingly expensive over the year and hard to get out of. But saying that, some payday advance companies offer discounts for people borrowing for the first time and also discounts to customers returning to them. You can be approved for up to $1,000 or sometimes even more. If you need some extra money to tide you over until payday then this sounds like the perfect solution for you. Payday loans are convenient and fast. Some people may think twice about getting a personal loan, but there really is no reason to be ashamed, so many people are taking out loans nowadays, we all experience financial difficulties from time to time.
Shelley Green is the owner of payday-loans-click.com payday-loans-click.com, a site that specializes in Payday Loans. Shelley Green is also the owner of loans-click.com Loans Click and refinance-click.com Refinance Click.
Payday loan companies offer customers the option of deferred deposit, or post dated check advance. This concept is based on the fact that many individuals are unable to fulfill their financial obligations between pay checks. In other words, the payday loan fronts the money that the client will be receiving in their next pay check. After the check comes in, the client owes the payday loan company that amount plus interest and fees depending on the company.
In order to receive a payday loan the applicant must go through an approval process. This process varies across different companies, but may include a background and credit check or the like. When an applicant is approved to receive a loan, the requested money will be transferred into the applicant’s account. At this time the loan company will also debit the applicant’s account for the applicable finance charges and other fees depending on the initial agreement.
In order to be officially approved for a payday loan, an applicant must have a legitimate income and valid proof of that income. A thorough credit check is often performed in order to predict repayment, but a poor credit history does not necessarily disqualify the applicant. There is often no collateral required to obtain a payday loan, but the applicant must authorize a demand draft from their checking account. The demand draft serves in place of a personal check from the applicant.
After final loan approval, the requested funds will then be transferred into the recipient’s checking account within one business day. In certain cases, fund transfer may be expedited to same day delivery, but this option varies from place to place. Once the funds are disbursed, the recipient is responsible for repaying the payday loan company. If the loan recipient thinks that their check will not clear, they must notify the company immediately to make special payment arrangements.
Only one payday loan can exist at any given time. Therefore, a loan recipient may not apply for another loan until their existing loan is paid in full. Depending on the company, a loan increase may be possible if additional funds are needed. If a loan recipient does not repay the loan, legal action is fully warranted.
It is part of the legal agreement that the recipient will repay the loan in full by a specified time line, and if the recipient fails to comply they are subject to penalty. Once all attempts at repayment fail, the case will be turned over to collections, which reflect quite poorly on credit status. For this reason, an applicant must be sure when obtaining a payday loan as negligence can cause many damaging circumstances.
Gregg Hall is an author living in Navarre Beach, Florida. Find more about this as well as a express-payday-loans.com no fax payday loan online at express-payday-loans.com www.express-payday-loans.com
Fresh start loans are specially designed to those uk borrowers who are financially strained and need adequate finance in order to recover their credits. More and more uk borrowers are getting into financial problems like these due to misuse of credit cards, store cards or over usage of their other financial products. A fresh start cheap personal loan can help a person who has filed a bankruptcy and is now looking out for loans to bounce back or to improve his credits.
Non traditional lenders have come out with a new fresh start guaranteed personal loan to help you recover your affected credits. Such fresh start unsecured personal loans are designed to target the niche market and fresh start loan personal are catching up. There is no definite purpose on how these fresh start loans should be used, but it is commonly used for starting a new financial life.
The positive aspect of such unsecured personal loans fresh start is that they have little credit and income requirements for approval and provide financing with reduced monthly installments and the repayment schedules can be stretched over to meet the borrower’s needs and budget. Moreover, no security attached in case of an unsecured personal loan.
Fresh start cheap personal loan
Such fresh start online loans are provided with convenient repay back schedule in both secured and unsecured form. Flexibility and easy approval are the plus points of fresh start cheap loan personal. It is essential for a borrower who has gone through trying times or bankruptcy process.
Fresh start unsecured personal loans!
Fresh start loans are essential tool used to overcome the after effects of bankruptcy and have served as a post bankruptcy loan to those who have failed to procure finance from other means. Make a fresh start despite of having gone through bankruptcy procedures and replenish your credit scores along with living your dreams.
Whom does a fresh start loan serve?
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Such fresh start fast-secured-loan.co.uk/guaranteed-personal-loans.html guaranteed personal loans serve borrowers who have missed their loan payments, defaulted on loan payments or bankruptcy and like.
Online start fresh loan products are attached with high interest rate as it is made to borrowers who are considered risky. They have had bad credits and have defaulted on loan payments therefore the bad credit loans, bankruptcy loans, pay day loans are the type of loans that is offered to such borrowers which are expensive as it is without a collateral. Understand the loan terms and conditions before opting for one.
Debt management solutions are ways of getting rid of debts. There are many debt management solutions. The following are practical debt management solutions to consider.
Replace your credit card with a debit card, this way you cannot accumulate fresh debts because you’re spending are limited depending on the amount you has on your account. Avoid using your credit cards to charge debts. It is easy to swipe card and pay hard cash when the balance comes at the end of the month.
Check banks that offer lower interest rate when incurring loans. Transfer your balance to the credit card provider that offers the lowest interest rate.
Consult your bank to obtain a debt consolidation loan; this will enable you to make single payment per month to different creditors. It will reduce your debt because it offers a lesser interest than the cumulative interest on your other loans.
Sell off unnecessary goods like antiques, jewelry or even an extra car. Liquidate some other assets or rent out an unused property. Take a second job; it is another way of generating extra income to get rid of debt faster.
All the possible solutions will be useless unless you curb your spending habits. Still, financial discipline is considered to be the best solution for managing debts.
Behzad Mahmoudi writes about different issues including bloggthat.info debt management subject in his weblog.
Having a credit card is a big responsibility, and oftentimes, this responsibility is not clear to college students. So before you sign up for a student credit card, reflect and determine if you can already handle such a powerful tool. Here are some questions to ask yourself before sealing the deal.
Am I ready? Financial preparedness should not be your only consideration when deciding whether or not to get a student credit card. More importantly, you should be mature enough to realize the seriousness of student credit and how it will affect your spending patterns and future credit stability.
Ask yourself if you are ready to start building your financial records. Keep in mind that how you use your student credit card will be reflected in your credit reports, which you need to keep healthy so that you can be qualified for bigger credit lines and loans in the future. Misuse of your card can permanently tarnish your credit history, disallowing you from taking out mortgage loans, business loans, car loans, etc. in the future.
Will I be able to pay the dues correctly and on time? Look at your current cash flow and assess whether you have enough to repay the charges you will make on your card. Write everything down – from the money you make working at the library to the money your aunt sends you for Christmas – and then compute the average amount you have on a monthly basis. Never spend more than this amount, because doing so will make it very hard for you to make payments.
Do I understand my legal rights and responsibilities as a cardholder? You need to have knowledge of at least the basic tenets of the Fair Credit Billing Act, which protects you from such catastrophes as billing errors, theft or unauthorized use of your card, among other things. You need to know where and how to report such an incident, should it happen.
Remember that you are responsible for your student credit card and everything that happens to it, and that failure to report loss and any unscrupulous activities done against your card makes you legally liable for the ramifications.
e-BankCreditCards.com Bank Credit Cards provides detailed information on Bank Credit Cards, Bank Secured Credit Cards, Bank Student Credit Cards, No Bank Account Credit Cards and more. Bank Credit Cards is affiliated with banking-web.com Banking Services.
The cost of gas has continued to inflate over the past thirty years. Gasoline companies vie for your valuable business by offering tempting rebates and other conveniences. Exxon makes it easier for you to buy; all you need to do is wave your card and fill up. “Speedpass: It’s more convenient than cash and faster than a credit card.”
How much do you want to pay for convenience? Stop and think before you apply for another credit card. What impact will an additional credit card have on your credit score?
Your credit score goes down a few points each time you apply for credit.
Your credit score goes down when you use unfavorable “consumer” credit. Gas company type of credit isn’t considered prime by mortgage lenders. In fact, the type of credit you use influences ten percent of your credit score.
Saving a little money for gas can cost you a lot of money in higher interest rates on your mortgages.
Also, gas company credit cards usually charge a higher interest rate than a major credit card like a bank Visa or MasterCard account. Check the annual fee. Some companies charge as much as $79 in annual fees. The big problem with gas credit cards–consumers let the account balance roll over to the next month and end up paying interest charges on top of the expensive gas. Will the 5 percent rebate make up for all these charges?
Now, for the good news…
Some banks offer quality Visa cards with rebates for gas purchased at any gas station. For instance, MBNA America Bank’s AAA Diamond Advantage Visa gives you both reward points and gift certificates. Other banks like Citibank partner with gas companies to issue a MasterCard with a 5 percent gas rebate and 1 percent rebate on general purchases. When you make the minimum number of purchases, your annual fee is waived. Maybe it’s time to transfer your airline mile credit cards into gasoline reward cards.
Choose your credit wisely. Determine your financial goals. Do you want to build wealth in real estate? Then make your number one priority for your credit: mortgage finance qualifications. Weigh your options of gas rebates with the bigger picture.
jeanettefisher.com Jeanette Fisher teaches how to get out from under credit card debt, how to use credit to make money, and six ways to build strong credit to finance your first home and multiple investment properties. For a free credit advice and free ebook “Credit Tips for Mortgage Financing,” see worryfreecredit.com worryfreecredit.com
The Euro feels like a novelty - but it is not. It was preceded by quite a few Monetary Unions in Europe and outside it.
To start with, countries such as the USA and the USSR are (or were in the latter’s case) monetary unions. A single currency was or is used over enormous land masses incorporating previously distinct political, social and economic entities. The American constitution, for instance, did not provide for the existence of a central bank. Founding fathers, the likes of Madison and Jefferson, objected to its existence. A central monetary institution was established only in 1791 (modelled after the Bank of England). But Madison (as President) let its concession expire in 1811. It was revived in 1816 - only to die again. It took a civil war to lead to a budding monetary union. Bank regulation and supervision were instituted only in 1863 and a distinction was made between national and state-level banks.
By that time, 1562 private banks were printing and issuing notes, some of them not a legal tender. In 1800 there were only 25. The same thing happened in the principalities which were later to constitute Germany: 25 private banks were established only between 1847 and 1857 with the express intention of printing banknotes to circulate as legal tender. In 1816 - 70 different types of currency (mostly foreign) were being used in the Rhineland alone.
A tidal wave of banking crises in 1908 led to the formation of the Federal Reserve System and 52 years were to elapse until the full monopoly of money issuance was retained by it.
What is a monetary union? Is it sufficient to have a single currency with free and guaranteed convertibility?
Two additional conditions apply: that the exchange rate be effective (realistic and, thus, not susceptible to speculative attacks) and that the members of the union adhere to one monetary policy.
Actually, history shows that the condition of a single currency, though preferable, is not a sine qua non. A union could incorporate “several currencies, fully and permanently convertible into one another at irrevocably fixed exchange rates” which is really like having a single currency with various denominations, each printed by another member of the Union. What seems to be more important is the relationship (as expressed through the exchange rate) between the Union and other economic players. The currency of the Union must be convertible to other currencies at a given (could be fluctuating - but always one) exchange rate determined by a uniform exchange rate policy. This must apply all over the territory of the single currency - otherwise, arbitrageurs will buy it in one place and sell it in another and exchange controls would have to be imposed, eliminating free convertibility and inducing panic.
This is not a theoretical - and thus unnecessary - debate. ALL monetary unions in the past failed because they allowed their currency or currencies to to be exchanged (against outside currencies) at varying rates, depending on where it was converted (in which part of the monetary union).
“Before long, all Europe, save England, will have one money”. This was written by William Bagehot, the Editor of The Economist, the renowned British magazine. Yet, it was written 120 years ago when Britain, even then, was debating whether to adopt a single European Currency.
Joining a monetary union means giving up independent monetary policy and, with it, a sizeable slice of national sovereignty. The member country can no longer control its the money supply, its inflation or interest rates, or its foreign exchange rates. Monetary policy is transferred to a central monetary authority (European Central Bank). A common currency is a transmission mechanism of economic signals (information) and expectations, often through the monetary policy. In a monetary union, fiscal profligacy of a few members, for example, often leads to the need to raise interest rates in order to pre-empt inflationary pressures. This need arises precisely because these countries share a common currency. In other words, the effects of one member’s fiscal decisions are communicated to other members (through the monetary policy) because they share one currency. The currency is the medium of exchange of information regarding the present and future health of the economies involved.
Monetary unions which did not follow this course are no longer with us.
Monetary unions, as we said, are no novelty. People felt the need to create a uniform medium of exchange as early as the times of Ancient Greece and Medieval Europe. However, those early monetary unions did not bear the hallmarks of modern day unions: they did not have a central monetary authority or monetary policy, for instance.
The first truly modern example would be the monetary union of Colonial New England.
The New England colonies (Connecticut, Massachusetts Bay, New Hampshire and Rhode Island) accepted each other’s paper money as legal tender until 1750. These notes were even accepted as tax payments by the governments of the colonies. Massachusetts was a dominant economy and sustained this arrangement for almost a century. It was envy that ended this very successful arrangement: the other colonies began to print their own notes outside the realm of the union. Massachusetts bought back (redeemed) all its paper money in 1751, paying for it in silver. It instituted a mono-metalic (silver) standard and ceased to accept the paper money of the other three colonies.
The second, more important, experiment was the Latin Monetary Union. It was a purely French contraption, intended to further, cement, and augment its political prowess and monetary clout. Belgium adopted the French Franc when it attained independence in 1830. It was only natural that France and Belgium (together with Switzerland) should encourage others to join them in 1848. Italy followed in 1861 and the last ones were Greece and Bulgaria (!) in 1867. Together they formed the bimetallic currency union known as the Latin Monetary Union (LMU).
The LMU seriously flirted with Austria and Spain. The Foundation Treaty was officially signed only on 23/12/1865 in Paris.
The rules of this Union were somewhat peculiar and, in some respects, seemed to defy conventional economic wisdom.
Unofficially, the French influence extended to 18 countries which adopted the Gold Franc as their monetary basis. Four of them agreed on a gold to silver conversion rate and minted gold coins which were legal tender in all of them. They voluntarily accepted a money supply limitation which forbade them to print more than 6 Franc coins per capita (the four were: France, Belgium, Italy and Switzerland).
Officially (and really) a gold standard developed throughout Europe and included coin issuers such as Germany and the United Kingdom). Still, in the Latin Monetary Union, the quantities of gold and silver Union coins that member countries could mint was unlimited. Regardless of the quantities minted, the coins were legal tender across the Union. Smaller denomination (token) silver coins, minted in limited quantity, were legal tender only in the issuing country.
There was no single currency like the Euro. Countries maintained their national currencies (coins), but these were at parity with each other. An exchange commission of 1.25 % was charged to convert them. The tokens had a lower silver content than the Union coins.
Governmental and municipal offices were required to accept up to 100 Francs of tokens (even though they were not convertible and had a lower intrinsic value) in a single transaction. This loophole led to mass arbitrage: converting low metal content coins to buy high metal content ones.
The Union had no money supply policy or management. It was left to the market to determine how much money will be in circulation. The central banks pledged the free conversion of gold and silver to coins. But, this pledge meant that the Central Banks of the participating countries were forced to maintain a fixed ratio of exchange between the two metals (15 to 1, at the time) ignoring the prices fixed daily in the world markets.
The LMU was too negligible to influence the world prices of these two metals. The result was overvalued silver, export of silver from one member to another using ingenious and ever more devious ways of circumventing the rules of the Union. There was no choice but to suspend silver convertibility and thus acknowledge a de facto gold standard. Silver coins and tokens remained legal tender.
This became a major problem for the Union and the coup de grace was delivered by the unprecedented financing needs brought on by the First World War. The LMU was officially dismantled in 1926 - but died long before that. The lesson: a common currency is not enough - a common monetary policy monitored and enforced by a common Central Bank is required in order to sustain a monetary union.
As the LMU was being formed, in 1867, an International Monetary Conference was convened. Twenty countries participated and discussed the introduction of a global currency. They decided to adopt the gold (British, USA) standard and to allow for a transition period. They agreed to use three major “hard” currencies but to equate their gold content so as to render them completely interchangeable. Nothing came out of it - but this plan was a lot more sensible than the LMU.
One wrong path seemed to have been the Scandinavian Monetary Union.
Sweden (1873), Denmark (1873) and Norway (1875) formed the Scandinavian Monetary Union (SMU). The pattern was familiar: they accepted each others’ gold coins as legal tender in their territories. Token coins were also cross-boundary legal tender as were banknotes (1900) recognized by the banks of the member countries. It worked so perfectly that no one wanted to convert the currencies and exchange rates were not available from 1905 to 1924, when Sweden dismantled the Union following Norway’s independence. Actually, the countries involved created (though not officially) what amounted to a unified central bank with unified reserves - which extended monetary credit lines to each of the member countries.
The Scandinavian Kronor held well as long as gold supply was limited. World War I changed this situation as governments dumped gold and inflated their currencies, engaging in competitive devaluations. Central Banks used the depreciated currencies to buy gold at official (cheap) rates. Sweden saw through this ploy and refused to sell its gold in the officially fixed price. The other members began to sell large quantities of the token coins to Sweden and use the proceeds to buy the much Stronger Swedish “economy” (=currency) at an ever cheaper price (as the price of gold collapsed). Sweden reacted by prohibiting the import of other members’ tokens. Without a fixed price of gold and without coin convertibility, there was no Union to talk of.
The last big (and recent) experiment in monetary union was the East African Currency Area. An equivalent experiment is still going on in the Francophile part of Africa involving the CFA currency.
The parts of East Africa ruled by the British (Kenya, Uganda and Tanganyika and, in 1936, Zanzibar) adopted in 1922 a single common currency, the East African shilling. Independence in East Africa had no monetary aspect because it remained part of the Sterling Area. This guaranteed the convertibility of the local currencies into British Pounds. Regarding this a matter of national pride (and strategic importance) the British poured inordinate amounts of money into these emerging economies. This monetary union was not disturbed by the introduction (1966) of local currencies in Kenya, Uganda and Tanzania. The three currencies were legal tender in each of these countries and were all convertible to Pounds.
It was the Pound which gave way by strongly depreciating in the late 60s and early 70s. The Sterling Area was dismantled in 1972 and with it the strict monetary discipline which it imposed - explicitly and through the free convertibility - on its members. A divergence in the value of the currencies (due to different inflation targets and resulting interest rates) was inevitable. In 1977 the East African Currency Area ended.
Not all monetary unions met the same gloomy end, however. Arguably, the most famous of the successful ones is the Zollverein (German Customs Union).
At the beginning of the 19th century, there were 39 independent political units which made up the German Federation in what is today’s Germany. They all minted coins (gold, silver) and had their own standards for weights and measures. Labour mobility in Europe was greatly enhanced by the decisions of the Congress of Vienna in 1815 but trade was still ineffective because of the number of different currencies.
The German statelets formed a customs union as early as 1818. This was followed by the formation of three regional groupings (the Northern, Central and Southern) which were united in 1833. In 1828, Prussia harmonized and unified its tariffs with the other members of the Federation. Debts related to customs could be paid in gold or silver. Several currencies were developed and linked to each other through fixed exchange rates. There was an over-riding single currency: the Vereinsmunze. The Zollverein (Customs Union) was established in 1834 to facilitate trade and reduce its costs. Most of the political units agreed to choose between one of two monetary standards (the Thaler and the Gulden) in 1838 and nine years later, the central bank of Prussia (which comprised 70% of the population and land mass of the future Germany) became the effective Central Bank of the Federation. The North German Thaler was fixed at 1.75 to the South German Gulden and, in 1856 (when Austria became associated with the Union), at 1.5 Austrian Florins (this was to be a short lived affair, because Prussia and Austria declared war on each other in 1866).
Germany was united by Bismarck in 1871 and a Reichsbank was founded 4 years later. It issued the Reichsmark which became the legal and only tender of the whole German Reich. The currency Union survived two world wars, a devastating bout of inflation in 1923 and a collapse of the currency after the Second World War. The Reichsmark became the solid and reliable Bundesbank. The Union still survives in the Deutschmark.
This is the only case of a monetary union which succeeded without being preceded by a political arrangement. It survived because Prussia was sizeable and had enough real power and perceived clout to enforce compliance on the other members of the Federation. Prussia wanted to have a stable currency and introduced consistent metallic standards. The other states could not deprive their currencies of their intrinsic values. For the first time in history, coinage became a professional economic decision, totally depoliticized.
In this context, we must mention another successful (on-going) union - the CFA Franc Zone.
The CFA (French African Community) is a currency used in the former French colonies of West and Central Africa (and, curiously, in one formerly Spanish colony). The currency zone has been in existence for well over three decades and comprises diverse ethnic, lingual, cultural, political and economic units. The currency withstood devaluations (the latest one of 100% vis a vis the French Franc), changes of regimes (from colonial to independent), the existence of two groups of members, each with its own central bank, controls of trade and capital flows - not to mention a host of natural and man made catastrophes. What makes it so successful is maybe the fact that the reserves of the member states are hoarded in the safes of the French Central Bank and that the currency is almost absolutely convertible to the French Franc. Convertibility is guaranteed by the French Treasury itself.
France imposes monetary discipline (that it sometimes lacks at home!) directly and through its generous financial assistance.
Europe has had more than its share of botched (the Snake, the EMS, the ERM) and of successful (ECU, the United Kingdom and Ireland) currency unifications.
A neglected one is between Belgium and Luxembourg (BENELUX is the political alignment which includes the Netherlands).
There is no real currency union here. Both maintain separate currencies. But their currencies are at parity and serve as legal tender in both countries since 1921. The Belgian Central Bank controls the monetary policies of both countries, with the exception of exchange regulations which are overseen by a joint agency. In both 1982 and 1993 the two countries considered dismantling the union - but this was not serious talk, the advantages being so numerous (especially to the smaller partner).
These three currency unions have all survived due mainly to the fact that one monetary authority has been responsible, at least de facto, for managing the currency.
What can we learn from all this (not insubstantial) cumulative experience?
(A) A dominant country is required for a Union to succeed. It must have a strong geopolitical drive and maintain political solidarity with some of the other members. It must be big, influential, and its economy must be intermeshed with the economies of the others.
(B) Central institutions must be set up to monitor and enforce fiscal and other policies, to coordinate activities of the member states, to implement political and technical decisions, to control the money aggregates and seniorage (=money printing), to determine the legal tender and the rules governing the issuance of money.
(C) It is better if a monetary union is preceded by a political one. Even so, it might prove tricky (consider the examples of the USA and of Germany).
(D) Wage and price flexibility are sine qua non. Their absence is a threat to the continued existence of any union. Fiscal policy (money transfers from rich areas to poor) are a partial remedy. They can mitigate and ameliorate problems - but not solve them. Transfers also call for a clear and consistent fiscal policy regarding taxation and expenditures. Problems like unemployment plague a rigid, sedimented union. The works of Mundell and McKinnon (optimal currency areas) prove it decisively (and separately).
(E) The last prerequisite is clear convergence criteria and monetary convergence targets.
Judging by these requirements, the current European monetary union did not sufficiently assimilate the lessons of its ill begotten predecessors. It is set in a Europe more rigid in its labour and pricing practices than 150 years ago, it was not preceded by serious political amalgamation, it relies too heavily on transfers without having in place either a coherent monetary or a consistent fiscal policy.
This monetary union is, therefore, likely to join its forefathers and remain a footnote in the annals of economic history.
About The Author
Sam Vaknin is the author of “Malignant Self Love - Narcissism Revisited” and “After the Rain - How the West Lost the East”. He is a columnist in “Central Europe Review”, United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.
His web site: samvak.tripod.com” target-new> samvak.tripod.com samvak.tripod.com
The conception of wedding has changed over the years. Its conception, its configuration, the way it is planned – all have changed through the past times. You can see it since you are planning your wedding or your child’s wedding. Wedding has been planned in your room, your mind, your house, your in-laws house. Every wall, every floor, everywhere you walk, your wedding is being planned. It is on your mind and finances come invariably into focus while the planning is going on. They are like the slight tap on your head that is constant and irksome and yet wanting to tell you something that is so essential. How do you stop that? You want to stop that! It can be stopped through - Wedding personal loans.
Around 2.5 millions weddings take place every year in U.K. an average budget on a wedding is estimated to be £ 20,000. Well that kind of money is not easy to accumulate. With 70% of the couples paying for their own wedding, it is not surprising that you are looking for a wedding loan. A wedding personal loan will provide your wedding plan with the solid foundation that it requires.
Finances are undoubtedly the root cause of disagreement between most of the couples. Planning and that too thoughtful planning are integral while taking a personal loan for wedding. Finding a low cost wedding loan can be sometimes an uphill struggle. It is, however, very important to know what you are getting into before taking a wedding loan. It is important to understand that every loan needs to be paid back. Wedding personal loans can be a very effective instrument provided you pick it up carefully like your best man or your wedding dress.
Wedding loan types are flooded with variety making it possible for every person to get a wedding loan. Personal loans for wedding will impart you the freedom to use the loan in whichever fashion you want. Loan lenders who provide personal loans are not much concerned with the way you use the loan amount, all they are concerned with is the repayment. You can pay for your reception, hotel, honeymoon, wedding photography, wedding cars etc. with wedding personal loans.
Wedding personal loans can be secured or unsecured. Secured personal loans for wedding necessitate you to place a guarantee against your loan claim. While the unsecured option for your wedding loan is open to all people who do not have a valuable asset to place as a loan. The only discrepancy between these loans is that the interest rates on unsecured wedding loans are higher than the secured. The reason being that secured personal loans for wedding give a security to the loan lender in case you fail to make repayments.
If you are a parent, wanting to finance the wedding of your son or daughter, you can apply for personal loans for wedding. The services provided with wedding loans are fast and efficient. The decision can be made within 24 hours or take a maximum of 72 hours. If loads of paperwork is like not your forte, there is news for you. The loans lending companies require you to fill a simple online form.
Bad credit wedding loans are not difficult to obtain but they don’t come without their own set of tribulations. The troubles are all defined in terms of interest rate. So with bad credit wedding loans the interest rates are higher than other loan types. Conventionally, people with bad credit like CCJs, IVAs, defaults, arrears were seen with suspicion. Now it has become easier for them to obtain wedding loans with bad credit. Wedding loan has opened vistas for everyone including graduates, self-employed, unemployed, contract workers, so on and so forth.
Interest rates on wedding personal loans are highly subjective depending on your loan amount, the loan term, the credit status. You can learn more about your own individual possibility of getting a loan by doing some research on the net. Loan lenders will supply you with a free quote for your wedding loans if you ask for one. You must compare loans. Comparing loan rates will help you finding the personal loan rate on wedding loan that is not only low but adjustable to your financial circumstances.
There are no rules in marriage. Though there are a lot of challenges in it. Understanding, faith, trust, commitment, positive attitude - That all you have. What you don’t have is money. Perhaps you woke up today with a prayer in your heart – ‘how can I give the person I love the chance to make a beautiful life with me’. Your prayers can be answered with Wedding personal loans.
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is as cautious about her finances as any person reading this is. She works for the personal loan web site chanceforloans.co.uk chanceforloans.co.uk
To find a personal loan that best suits your needs visit chanceforloans.co.uk chanceforloans.co.uk
Debt consolidation means taking one loan to pay a number of smaller loans. This consolidation of debt enables you to secure lower interest rate. There are numerous debt consolidation companies that will provide you different options to consolidate your debt and help you avoid bankruptcy.
First, let us try to understand why one gets into debt. Normally you will have debt from one or two sources. But when the debt starts increasing, you look for more sources of credit. The best way of getting out of debt is to decrease your expenditure and or increase your income and ensure that you are left with excess money each month to repay your monthly instalments. But when you do not pay attention to repaying your instalments and look for different sources to get more loan, you end up having a number a creditors.
Now the interest rate with each creditor is different. Moreover the duration of the loan is different and you don’t know whom to pay first. Everything becomes very complex. To make things simple, you should opt for debt consolidation.
After debt consolidation, you will have to pay the loan to a single entity with a fixed interest rate, which is generally lower than the combined interest rate you had to pay earlier. Imagine the pace of mind you will get if you have to sign just one check every month.
The different reasons for consolidating your debt include the following:
1. You have to pay lower monthly instalments after debt consolidation.
2. Managing your debt becomes easy, because earlier you had to pay numerous instalments and now you have to sign only one check.
3. You will also get a clear understanding of how much money you have to pay each month. Thus things are no more complicated.
4. You also get low interest rate and you can save money over your entire loan. Banks have interest rates lower than interest rates on credit cards; however, the bank interest rate is also higher when you compare it with the interest rate of the consolidated loan.
5. You also save time as you don’t have to sign numerous checks, post them or calculate your total monthly instalment.
6. There is also little chance of forgetting to pay any instalment as there is only one instalment now. Earlier there were numerous instalments and the chance of forgetting an instalment was very high.
Another advantage of debt settlement is that your creditors cannot contact you for the debt after you consolidate your debt. You also get a clear understanding of much you debt you own and when you have to pay it, at what interest rate and what will be monthly instalments.
Debt consolidation is generally beneficial; however, it can also lead to bankruptcy if you fail to pay back your consolidated loan. Hence you should be careful while consolidating your loans. The debtor who takes a loan to secure his credits is called debt consolidator.
The main aim of the debt consolidator should be to get an interest rate as low as possible. You should also have a plan ready to repay the loan.
Also check out how much time is realistic for you to repay the loan and seek a consolidated loan accordingly. If you do not pay attention to this while consolidating your loans, you might get into trouble later. Also do not show any laziness in payback, or do not take the consolidated loan for granted thinking that you will get another alternative to get out of the consolidated loan. No, the way out is bankruptcy and it is the last thing that you want to happen to you.
Once you have decided to consolidate your loan, there are various ways in which you can do it. The different types of debt consolidations include the following:
• Secured consolidated loan: You can take a loan by securing your asset such as property or land. This involves low interest rate, but you risk your asset. Home equity loan is a type of secured consolidated loan.
• Unsecured consolidated loan: This loan comes with higher interest rate as you do not provide any security on the loan amount. Personal loan is the best example of unsecured consolidated loan.
• Debt settlement: There are special debt settlement companies which will carry out the entire debt settlement negotiation for you and pay your loan for you. You in turn will have to pay the company loan in fixed monthly instalments. You creditors cannot contact you once you take the services of a debt settlement company.
• Credit counselling: Credit counselling companies are well known for debt consolidation. These companies will help you get out of your debt as soon as possible.
Whatever way you choose to consolidate your loan, you should always be cautious in your debt consolidation. As told earlier, probably this is the last thing you can resort to before you are forced to file a bankruptcy.
