Debt Payments Research Articles

Modern Corporate Insolvency Regime in India: A Review

Insolvency and Bankruptcy Code (IBC), Corporate Insolvency Resolution Process (CIRP) in particular, has emerged as one of the most successful regulations in India for a number of reasons and this paper would explore these very reasons and present the major factors which contributed towards success of the Code so far. Paulo Coelho’s statement, “when you want something, all the universe conspires in helping you to achieve it”, seems to be fitting right for IBC. Beginning with the constitution of the Expert Committee on the subject in August 2014, in 6 years, a great transformation has happened in the law, policy and practice in dealing with financial distress. The reference points have changed to an extent that a default in payment of debt which was considered routine before IBC is now a major concern for enterprises. It has contributed towards evolving a ‘culture of compliance’, which is termed as the ‘modern corporate insolvency regime’. The regime witnesses a change from ‘debtor-in-possession’ to ‘creditor-in-possession’, clarity on the concept of ‘default’, concept of financial creditor, and a predictable framework of timely, efficient and fair resolution is the hallmark of the modern regime. The institutional pillars under the Code make the process of CIRP smooth, handled by professionals trained to handle stressed assets as a going concern. A regulator with a difference facilitates creation of an ecosystem to further the objectives of the Code. This paper would briefly trace the development of the modern corporate insolvency regime in India, elaborate the functioning of the institutional pillars and analyze some of the major jurisprudential developments. At the end, some major areas which requires further progress or the unfinished agenda will be brought forward. Paper intends to provide a general overview of the modern corporate insolvency regime in India.

Sources of Macroeconomic Instability: Implications on Foreign Direct Investment Inflow in Sub-saharan Africa, A PMG/ARDL Approach

This study investigates the short and long run effect of diverse sources of macroeconomic instability on the inflow of foreign direct investment (FDI). The stability of the business environment of a host country will determine the extent to which these economies will absorb shocks and make the economy attractive to foreign investors. We evaluate the role played by macroeconomic instability conditions in determining the inflow of FDI in Sub-Saharan African (SSA) economies, where FDI inflow have been relatively low and macroeconomic instability variables like inflation, external debt and exchange rate has persistently shown volatile trends as compared to other regions in the world. This study employs the Pooled Mean Group (PMG), Mean Group (MG) and Dynamic fixed effect (DFE) autoregressive distributive lag (ARDL) estimation approaches which account for both non-stationarity and heterogeneity effects, in a panel of 31 SSA countries and covers the period 1990 to 2017. We equally employ first and second generation panel unit root test, cross sectional dependence test and cointegration test. The Hausman test is used to select the most efficient estimation technique between the MG, PMG and DFE techniques. The results reveal a negative but insignificant effect of inflation on FDI both in the short and long run. Equally, a positive but insignificant effect of external debt and a negative but insignificant effect of exchange rate are observed in the short run. In the long run, external debt significantly crowds out FDI while exchange rate significantly crowds in FDI in the sub-Saharan African sub region. Based on the findings, we recommend that debt contracted in the sub region should be channeled to productive use like road infrastructure and renewable energy, while currency depreciation should be encouraged in order to render investors within this region more competitive. The used of monetary and fiscal policies should be employed to tackle macroeconomic uncertainty. Capital account regulation should equally be adopted to ensure a competitive real exchange rate. Equally, the debt carrying capacity of each economy should be identified in order to avoid debt unsustainability or payment and servicing default.

Budget deficit-macroeconomic variables nexus in Kenya

Aim/purpose – The aim of this paper was to establish the nexus between a budget defi- cit and selected macroeconomic variables in Kenya. This adds to the existing literature while the methodology and choice of the econometric tools used improve the predictabil- ity of the link between a budget deficit and macroeconomic variables. The results are relevant to policy makers as they may help improve understanding of budget deficit management. Design/methodology/approach – The study used time series data for the period from 1976 to 2018 and employed the Vector Autoregression model reinforced by the Keynesian Mundell–Fleming framework. Findings – The impulse response function derived from the vector autoregression model revealed that shocks from both interest rate and exchange rate had a positive impact on budget deficit. External debt servicing and current account deficit shocks had a negative impact on the budget deficit. Research implications/limitations – Interest rate and exchange rate policies remain key in reducing the growth of the budget deficit. Policies on external debt servicing, such as timely payment of debts and prudent investment of borrowed funds, will also reduce the budget deficit. Originality/value/contribution – The study employed transmission mechanism which involves multiple equations to establish the nexus between a budget deficit and macroe- conomic variables in Kenya. Keywords: budget deficit; selected macroeconomic variables, Kenya. JEL Classification: H60, H62, H68.

Steering Loan Modifications Post-Pandemic

As part of federal and state relief programs created during the COVID-19 pandemic, many American households received pauses on their largest debts, particularly on mortgages and student loans. Others may have come to agreements with their lenders, likewise pausing or altering payment on other debts, such as auto loans and credit cards. This relief allowed households to allocate their savings and income to necessary expenses, like groceries, utilities, and medicine. But forbearance does not equal forgiveness. At the end of the various relief periods and moratoria, people will have to resume paying all their debts, the amounts of which may have increased to account for any missed or reduced payments. Yet in the interim months, people have faced persistent unemployment and dwindling household wealth. Many likely will be unable to resume all debt payments, leading them into formal or informal bankruptcy. Incentivizing lenders to work with people to craft successful loan modifications will stave off a swell of bankruptcy filings and economic loss. The 2008 financial crisis showed how poorly prepared creditors were to offer successful debt workouts. Now is the time for policymakers to plan for the coming crash of needed loan modifications across consumer credit products. This Essay sketches a path for how that should be done.

Analysis Of The Impact Of Covid-19 On The Financial Statements Of Companies In BIST 100 By Ratio Method

Covid-19 tüm dünya ekonomilerini etkilemesi nedeniyle çok farklı alanlarda birçok çalışmaya konu olmuştur. Bu çalışmaların temel olarak iki kısıtı bulunmaktadır. Bunlardan biri, salgının başlamasından itibaren geçen sürenin kısalığı nedeniyle elde yeteri kadar veri olmaması, diğeri de, salgının boyutu, yayılma alanı ve ne zaman biteceğine ilişkin belirsizliktir. Bu çalışmanın amacı, Covid-19’un etkilerini, BIST 100 şirketlerinin mali tabloları üzerinden oran yöntemi ile analiz etmektir. BIST 100’de yer alan 84 şirket kapsama dahil edilmiş, banka, sigorta, leasing şirketleri ile sektör bazında tek olan ve özel hesap dönemine tabi şirketler dahil edilmemiştir. Çalışmada kullanılan veriler, Kamuyu Aydınlatma Platformu’ndan (KAP) elde edilmiş olup, elde edilen veriler karşılaştırmaya ve analize uygun hale getirildikten sonra, Microsoft (MS) Excel bilgisayar yazılımı yardımı ile analiz edilmiştir. Çalışma Covid-19’un mali tablolar üzerindeki etkisini oran yöntemiyle analiz eden ilk çalışma olup, şirket ve sektör sayısı itibariyle en geniş kapsamlı olanıdır. Analiz sonucunda, enerji, imalat, toptan ve perakende sektörlerinde likidite oranlarında iyileşme olurken, diğer sektörlerde bozulma olduğu, mali yapı oranları açısından, imalat, teknoloji, ulaştırma ve haberleşme sektörlerindeki oranların geçen yıla göre daha iyi olduğu, varlık kullanım oranlarının toptan ve perakende sektörü hariç hepsinde bozulduğu, enerji, teknoloji, toptan ve perakende sektörü hariç diğer sektörlerde, dönem karlarının düştüğü, teknoloji sektörü dışında tüm sektörlerde ticari borç ödeme süreleri ile alacak tahsil sürelerinin uzadığı tespit edilmiştir. Özetle, Covid-19’un BIST 100’de yer alan şirketlerin mali tablo oranlarını etkilediği ve bu bulguların yapılan diğer çalışmalarla uyumlu olduğu sonucuna ulaşılmıştır.

Insolvency Proceedings: ASEAN and EU Comparison on the Rules of Foreign Court Jurisdiction

Due to a lack of uniformity or harmonization of laws and regulations, cross-border insolvency has remained an issue in the ASEAN region. ASEAN economic openness with the implementation of the ASEAN Free Trade Area (AFTA) and ASEAN Economic Community (AEC) may create issues at some points as investors compete to dominate the ASEAN while assets are located not only on their own territory but also in other ASEAN member countries. On some occasions, they can fail to meet their debt payment obligations when performing international business transactions. As a result of the bankruptcy case, a legal arrangement may exist between the country in which the business actor is declared bankrupt and the country in which the bankrupt debtor's assets are located. This interaction between two or more countries involves a clash of jurisdictions. In order to counter such an issue, ASEAN may learn from what the EU has done over these decades. The study aims to compare the regulatory issue of foreign court jurisdiction in settling the insolvency cases both in ASEAN and EU. The paper is normative-qualitative legal research. It used a comparative, statute, and conceptual approach. It is found that in terms of cross-border insolvency, the European Union is far ahead of ASEAN, given that at least two major regulations in place, namely EC Regulation 1346/2000 and EU Regulation 2015/848, while ASEAN has almost nothing to offer at this time. The experience of the EU to formulate and implement a settled regulation on foreign court jurisdiction in settling the insolvency cases among EU member countries is one of the valuable lessons that ASEAN may take from the EU.

Analisis Hadits Ahkam Muamalah dalam Fatwa DSN MUI tentang Murâbahah, Salam dan Istishnâ’

Murâbahah, salam and istishnâ' is a type of buying and selling that is currently known conceptually can be an option in the products of Islamic financial institutions. DSN-MUI as an institution that has authority in Islamic economic and finance fatwas has formulated a fatwa on these three types of buying and selling, where in the fatwa there are hadiths ahkam muamalah as the legal basis. This paper aims to analyze the hadiths ahkam muamalah in the fatwa DSN-MUI about murâbahah, salam and istishnâ' through the study of existence (takhrij hadith) and substance (study of meaning) hadith. Based on the analysis conducted, hadith ahkam muamalah in the fatwa DSN-MUI on murâbahah, salam and istishnâ', broadly explains the principle of sharia agreement (ar-ridha, al-ibâhah, al-mashlahah), blessings in the sale and purchase of cashless (classed as hadith dhaif in the category of hadith majhul), prohibition of delaying the payment of debts for the able, legality of buying and selling salam dan legality of advances in the sale and purchase (classed as hadith dhaif in the category of hadith mursal).

The case for starting a new exchange rate after debt settlement: Reexamining alternatives to Argentina’s exchange rate policy in 2001–2002

AbstractThis research explores the question of which exchange rate regime would bring about better output and price stability, given the initial conditions and the external shocks facing Argentina’s economy in 2001–2002. Our analytical model incorporates a transmission mechanism, the balance‐sheet effects, which formulates the possible interaction between foreign debt and exchange rate policy. We find that a floating exchange rate that depends on external finance outperforms dollarization, after supposing the amount of foreign debt payments is limited. As the relative performance of alternative exchange rate arrangements depends on the foreign debt payments, our empirical results imply that the restructuring of foreign debt should be an integral part of any negotiation concerning the postcrisis exchange rate regime. Our results also show that with the existence of foreign debt, the policy trade‐off implied by the Trilemma becomes much constrained.

Sovereign Debt Standstills

As a response to economic crises triggered by COVID-19, sovereign debt standstill proposals emphasize debt payment suspensions without haircuts on the face value of debt obligations. We quantify the effects of standstills using a standard default model. We find that a one-year standstill generates welfare gains for the sovereign equivalent to a permanent consumption increase of between 0.1% and 0.3%, depending on the initial shock. However, except when it avoids a default, the standstill also implies capital losses for creditors of between 9% and 27%, which is consistent with their reluctance to participate in these operations and indicates that this reluctance would persist even without a free-riding or holdout problem. Standstills also generate a form of “debt overhang” and thus the opportunity for a “voluntary debt exchange”: complementing the standstill with haircuts could reduce creditors’ losses and simultaneously increase welfare gains. Our results cast doubts on the emphasis on standstills without haircuts.

An income determination model for Greece in the Euro Zone

AbstractThis paper modifies the income determination model to focus on two viable policies that would raise income in Greece with the government facing sizeable interest and debt payments. The usual macroeconomic policy options are unavailable in the Euro Zone with the balanced budget constraint, outside currency and fixed interest rate. On the monetary side, banking policy reform would eliminate bank account restrictions and mandatory purchase of government bonds. On the real side, investment policy reform would streamline the rent seeking bureaucracy. Together these policy reforms lead to income overshooting with a transitory trade surplus raising the money supply.

The development of ferrous metallurgy is an effective way to restore the Syrian economy

The Middle East is a victim of civilian contacts. Under the current conditions, the question arises of rationalizing the investment strategy of the post-war development of the countries of the region that have managed to overcome this crisis. In the article this problem is considered on the example of Syria. A rational way of multiplicative stimulation of the development of the country’s economy is proposed, based on the approach of J. M. Keynes. This approach consists in choosing the most favorable conditions for investment. According to the results of research at this point (industry) was ferrous metallurgy. At the initial stage of the post-war reconstruction of the republic, it can come out with a locomotive. The optimal configuration and place for the construction of a production metallurgical cluster that provides the market with the most popular types of metal products: 1 million tons per year of hot-rolled sheet (1-12.5 mm), 150 thousand tons of galvanized sheet per year (0.2-2, 5 mm), 200 thousand tons per year of shaped steel (2-8 mm), 50 thousand tons per year of galvanized shaped steel (0.7-3 mm). The functioning of the cluster will provide Syria with sheets and fittings, will contribute to the development of engineering and other sectors of the economy, will lead to an increase in the country’s GDP by 4.5% and a reduction in government debt payments by $ 532.5 million per year.

Material Adverse Change: An Alternative Solution to Suspension of the Debt Payment.

The research aimed to provide alternative solutions with Material Adverse Change (MAC) before reaching the suspension of the debt payment obligation stage. The pandemic situation had caused many companies to experience difficulties in fulfilling their obligations, including payment obligations or debts to suppliers and creditors. If there were circumstances where the company could not fulfill its obligations, then the creditor would be able to collect through debt-restructuring to bankruptcy. The restructuring was carried out through the suspension of the debt payment obligation (Penundaan Kewajiban Pembayaran Utang/PKPU). The research used normative juridical methods. It focused on credit and financing transactions between companies and creditors, both banking or finance companies. The research concludes that before the suspension of a debt payment obligation, companies and creditors should negotiate based on MAC before reaching a lawsuit. In the MAC, there is an explicit clause, and it is agreed by both parties, then the creditor should acknowledge the company’s actual condition.

The Hedonics of Debt.

Psychologists and economists often discuss the “pain” of paying for our purchases. Four experiments examine how people evaluate prospective debt payments, analyzing how different features of a loan (down payment, final payment, duration, monthly payments) affect willingness to accept the loan. Akin to previous findings on physical pain, participants exhibited duration neglect and overweighted final moments. However, participants also focused heavily on the monthly or average payment (unlike in retrospective studies of physical pain where only peak-end moments seem to count). In Experiment 2, participants’ willingness to accept the loan was not significantly diminished by making it more expensive through keeping the same monthly payment but extending the length of the loan by 40% (evincing duration neglect). Further, in Experiments 3 and 4, we show that participants increased their willingness to buy if loans were made longer and more expensive by adding smaller, less “painful” payments to the end.

Court-Ordered Government Debt Payment in Brazil: Perspectives for Blockchain Technology

Court-Ordered Government Debt Payment in Brazil: Perspectives for Blockchain Technology

Belediyelerin Borç Ödeme Gücünün Analizi: Muğla-Sakarya Belediyeleri Örneği

Effective use of resources is one of the important issues in non-profit organizations as well as in profit-making businesses. In order to ensure effectiveness in the use of resources, necessary measures should be taken in order to measure the current situation and to ensure effectiveness in the future use of resources in cases where there is a deviation from the objectives. Various financial analysis techniques are used to measure the current and past financial performances of institutions and to make predictions about the future. These analysis techniques, which have been used in businesses for a long time, have become widespread recently in institutions that serve the public interest. One of the analysis techniques commonly used in non-profit organizations as well as businesses is ratio analysis. In the study, the liquidity and financial structure ratios of the metropolitan municipalities in Muğla and Sakarya provinces and 12 district municipalities affiliated to these municipalities were calculated based on the 2018 balance sheet data used by the institutions and submitted by the institutions. In the analysis, together with the frequently used rates, the rates used to determine the debt payment power of the enterprises used by the TCMB in the sector analysis were taken as basis. Although there are minor differences, it has been determined that the municipalities in Sakarya and Muğla provinces have high short and long term debt payment powers.

Untangling the Credit Card Debt Puzzle

This paper documents new facts and untangles mechanisms regarding the credit card debt puzzle that describes the co-holding of high-cost debt and low-yield assets. First, I capture more accurately the costs of co-holding because I identify households who are on decreasing and increasing paths of co-holding. Second, liquidity-based hypotheses are insufficient to explain co-holding because co-holding occurs even with high liquidity and low credit limit risk, and few co-holding households take up an offer of low-cost liquidity. Third, limited intra-household financial pooling contributes to co-holding because couples are more likely to co-hold than individuals, and the intra-household distribution of assets and liabilities affects household demand for low-cost liquidity. Finally, anchoring to the minimum credit card debt payment contributes to co-holding.

The effect of interest rates on home buying: Evidence from a shock to mortgage insurance premiums

Regression discontinuity estimates indicate that home buying is highly responsive to interest rates in a large segment of the population. A surprise 50 basis point cut in the effective interest rate for mortgages insured by the Federal Housing Administration (FHA) led to an immediate 14 percent increase in home buying among the FHA-reliant population. We show that this large, extensive-margin effect arises from the rate cut helping borrowers overcome maximum debt payment to income (DTI) thresholds. We conclude that binding DTI constraints are an important feature of the mortgage market that amplify the effect of interest rate shocks.

SISTEM PEMANTAUAN PEMBAYARAN PIUTANG NASABAH BERBASIS WEBSITE PADA PT. GUNA ARTHA KENCANA

This study aims to find out how Website Based Customer Accounts Receivable Monitoring System at PT. Guna Artha Kencana. This study uses a qualitative research approach, the subject of this research id Debt Payment Monitoring System at PT. Guna Artha Kencana. The object of this research is the financial manajer of PT. Guna Artha Kencana. The method used in this research is the Linear Sequential Model, the data collection method used is interviews to obtain primary data and literature studies to obtain secondary data and to design using the Laravel Framework and PHP programming. The results of this research are successful in designing a system for controlling customer receivables payments where this system can be used to record and process every transaction that occurs in the company and this system can also be used to monitor the status of customer account receivable.

Using financial tips to guide debt repayment: Experimental evidence from low- and moderate-income tax filers

Tax filing in the U.S. often has substantial implications for the debt burdens of low- and moderate-income (LMI) households. The tax refund—often the largest payment LMI households receive in a year—provides these households with an opportunity to reduce their debt, while tax liabilities can lead them to take on additional debt. Though paying down debt is among the most common uses of the tax refund, households often do not optimally allocate their debt payments. We assess whether offering simple financial guidance can help households meet their debt obligations by administering a field experiment that provided debt management tips to LMI tax filers after tax filing. Four treatment groups saw one of four tips, while a fifth treatment group could select which of the four tips was best suited to their financial situation. Results from a follow-up survey found no effects of the intervention on reported rates of following the tips or on the amount of debt held. However, we do find that the tips reduced the incidence of holding unsecured debt by 5 percentage points (p<0.05). The primary drivers of these effects were tips advising participants to prioritize paying their smallest debt balance or their highest cost debt.

Why the Future Revised Kyoto Convention Should Contain Comprehensive Rules of Customs Debt

The Revised Kyoto Convention (RKC) is currently being reviewed as part of an ongoing review process. The aim of the comprehensive review is to enhance the current provisions and advance them in order to meet today’s needs and challenges. It is the intention of the World Customs Organization (WCO) that the RKC remains the blueprint for modern and efficient customs procedures in the 21st century. This should also apply to customs debt issues since customs debt law constitutes a central aspect of all national customs legislation. The status quo of the RKC does not, however, correspond to the fundamental role of this decisive area in customs law. Against this background, this article deals with the motivations, extent and intermediate results of the present review process. Moreover, it examines the advantages and challenges of a comprehensive and harmonised implementation of the Convention. In particular, it addresses the proposal of establishing a global standard, a model law, regarding customs debt issues for national customs legislation that would foster transparency, facilitation and predictability, while at the same time reducing randomness and complexity. The article provides an insight into the status quo of the current RKC provisions relating to customs debt and looks at some national legislation regarding these issues. It illustrates why it is necessary that a future RKC includes harmonised standards and/or recommended practices regarding the incurrence, payment and extinguishment of a customs debt and it also elaborates on the principles and concepts, such as the economic theory of customs, that should be reflected and included in a possible system of customs debt provisions.