How To Find Variable Cost: Examples, Formula, and Guide To Calculate It

When faced with debts that you cannot pay, it may seem like there is no way out. However, a bankruptcy discharge could release you from personal liability. Before taking any steps, it’s important to know what bankruptcy discharge means and how you can file for an order of discharge in your personal situation. Given that the average American has over $21,000 in debt from personal loans and credit cards alone, discharged bankruptcy is a relevant topic for many people across the country. Here’s all you need to know about discharged bankruptcies. The Bankruptcy Discharge Definition When it comes to the bankruptcy discharge meaning, LawInsider.com defines it as “a court order that ends bankruptcy proceedings as old debt and hence releases the debtor from the responsibility of repaying certain types of debt.” In essence, a discharged bankruptcy will free you from any obligation to repay the debts covered by the order of discharge. This also means that creditors can no longer take action against you in relation to those debts. Those actions include debt collection, attempts at legal action, and communication with you via letters or telephone calls. A discharged bankruptcy may occur when you file a Chapter 7, 11, 12, or 13 bankruptcy. Before filing for a discharge order, though, it’s important to recognize the downsides of bankruptcy while also researching which debts can or cannot be discharged.  How Can You Get a Discharge of Bankruptcy Order? Under most circumstances, debtors are automatically given a discharge during their bankruptcy case unless creditors object. So, by informing your attorney to file for bankruptcy, an order discharging debtor liability will be included as a part of the legal proceedings.  Assuming no litigation involving objections is posted, the Federal Rules of Bankruptcy Procedure will ensure that copies of the order of discharge are provided to the debtor (you), the debtor’s attorney, the US trustee, the case trustee, the trustee’s attorney, and all creditors. The notice of bankruptcy discharge proof also informs creditors that your financial liability has been dropped and advises them not to pursue any further action. The length of time that it takes to acquire a discharged bankruptcy order depends on the bankruptcy chapter filed. Generally speaking, the timeframes are as follows: Chapter 7 (for liquidation): Courts grant discharges following the expiration of a creditor’s complaint objection period, which is usually between 60 and 90 days after your 341 meeting. This generally happens four months after you, the debtor, files a petition at the bankruptcy court. Chapter 11(for an individual chapter 11 bankruptcy): The courts grant an order of discharge once you have completed all payments under the bankruptcy agreement. Chapter 12 (for an adjustment of debts of a family farmer or fisherman): The courts will also grant the discharge after payments have been completed. Due to the nature of this bankruptcy hearing, it usually takes between three to five years to secure the discharge after the filing date. Chapter 13 (for an adjustment of debts for an individual with regular income): The order may be granted by the courts as soon as the agreed payments are finalized. Again, it often takes three to five years after the date of filing.  It should also be noted that you may be required by the Bankruptcy Code to complete an instructional financial management course. However, there are exceptions to this ruling, including a lack of adequate local educational programs or if the debtor is living with a disability. Understanding the Inclusions of Discharged Bankruptcy Orders When trying to work out how a bankruptcy discharge is relevant to your personal financial situation, you’ll naturally want to know what types of debt can be discharged. After all, bankruptcy discharge orders don’t cover everything. Section 523(a) of the Bankruptcy Code details a number of exceptions under each chapter of bankruptcy.  When filing a Chapter 7, 11, or 12, there are 19 categories of nondischargeable debts, while the list is a little smaller for Chapter 13. Below are a few examples: Certain tax claims  Child support payments  Spousal or alimony payments  Government penalties Guaranteed educational loans Cooperative housing fees While secured debts cannot be included, a valid lien or sale of the secured asset can be used to repay the debts, with the shortfall (remaining balance) subsequently being included in the order of discharge. It should also be noted that obligations affected by fraud or maliciousness won’t automatically be exempted from a discharge. It will be up to creditors to post an objection to these. If they do not, they will be included in the order discharging debtor responsibilities. Before filing for bankruptcy, it’s important to do your homework or speak to an attorney/financial advisor about the debts that can be discharged and the ones you would be liable to pay. Bankruptcy Closed vs. Discharged A bankruptcy discharge order doesn’t necessarily translate into a case closed. In a simple Chapter 7 bankruptcy without assets being lost, the closure should occur a few days after your discharge. When assets are being lost, any relevant litigation must be finalized before closure can occur. In cases where a repayment plan is needed, the closure won’t happen until after the trustee has confirmed the final report for payment distributions. Generally speaking, it is only the Chapter 7 bankruptcy cases involving difficult assets that are kept open for long periods. Although rare, it is also possible for debtors, creditors, or trustees to reopen the bankruptcy case if a debt hasn’t been listed or if false information has been provided. What Else You Need to Know About Bankruptcy Discharging Before thinking about bankruptcy, you must consider the impact it will have on your financial future. For starters, you will still be required to pay secured debts, while the impact on your credit score will last for up to eight years.  Many people who file a bankruptcy worry about what it means for their career, but the good news is that employers are prohibited from discriminatory treatment of debtors based on their bankruptcy status. This covers both public and private businesses. Furthermore, bankruptcy courts may permit those who file for bankruptcy to run businesses even before the discharge. That’s why it’s important to stay up to date on the best business banking options. A second discharge in a Chapter 7 case will be rejected if you have already received a discharge within the last eight years for a Chapter 7 or 11. This duration is reduced to six years for Chapter 12 and 13 cases. This is unless all unsecured debts from the previous discharge have been cleared. Finally, you will be advised to keep hold of your bankruptcy discharge proof letter in case creditors attempt to take action against you after the confirmation. Should this happen, you will be in a position to file a motion with the court. Should you lose your copy of the discharge order, it is possible to request another from the clerk at the bankruptcy court for a fee. Electronic documents may also be available via the clerk’s PACER system. Conclusion By now, you should have a solid understanding of the bankruptcy discharge meaning in law and how it can impact your future following any proposed bankruptcy. Under the right circumstances, it can be an attractive option that removes some of your financial burdens while also putting an end to annoying calls and debt collection actions.

Bonds are a good investment option for those seeking a return on their capital because they tend to offer a reliable and predictable income stream. In this article, we will explain what bonds are and how they work. We will also discuss the benefits and risks associated with bond investments and share tips on how to get started in bond investing. What Are Bonds, and How Do Bonds Work? Bonds are debt securities that are issued by governments and corporations in order to raise capital for projects, expansions, and other purposes. When you buy a bond, you are essentially lending money to the bond issuer. In exchange for your investment, the issuer agrees to make interest payments at regular intervals, as well as repay the principal amount of the loan when the bond matures. Investment bonds enable the issuer to secure cash flow at specified dates. From the investors' side, bonds are a low-risk investment with typically good interest rates. But not all bonds are created equal. Some are a better investment than others. Characteristics of a Bond Bonds come with a number of different characteristics, including the following: Face value: This refers to the amount that the bond will be worth when it matures. Maturity date: This is the date on which the bond will be repaid in full. Coupon rate: This is the annual interest rate paid on a bond. Yield: This is the return an investor will realize on a bond. On top of these basic characteristics, there are a couple of other aspects that define a bond. Some of the bonds are secured, while others are unsecured. Secured bonds typically have assets backing them that guarantee payment to bondholders if the company cannot meet its obligations. On the other hand, unsecured bonds are not backed by collateral and are a much riskier investment. Different bonds also have different tax statuses. Most are taxable investments, but there are some government-issued bonds that offer tax breaks. These are typically used as a way to encourage investments in specific projects, such as infrastructure development. Tax-exempt bonds normally have lower interest rates than equivalent taxable bonds.   Knowing the difference between taxable and tax-exempt options is a critical part of understanding bonds. An investor must calculate the tax-equivalent yield to compare the return with that of taxable instruments. Most of the tax software available online can help investors with this type of math when preparing for tax season. Callable bonds can be paid off before they mature. This commonly happens with call provisions, which allow companies to retire the instrument at any point during or after its term by prepaying them for a premium amount equal in value of interest earned on reinvested payments made over time. An Example of How Bonds Work So, how do bonds generate income for investors? Here’s an example that makes the aforementioned characteristics more tangible.  Let’s say the city of Chicago is looking to build a new community center but doesn’t have the funds for the project. So, it issues bonds to raise the cash instead of going through a crowdfunding platform or a financial institution. Each community center bond has a face value of $100. This is essentially a loan each investor lends to the city of Chicago. It promises to repay the loan in 10 years, which is the bond's maturity date. However, to be able to sell as many bonds as possible, Chicago also has to entice investors to loan them the money. This is where one of the many important bond features comes in. The coupon rate is, in essence, a yearly interest rate that Chicago will pay to its investors. For this example, let's say that each bond has a 5% coupon rate - each investor will receive $5 each year. After 10 years, when the bond is due, each investor will have yielded $150. Chicago will pay back the principal of $100 as the bond matures, which, combined with $5 of fixed income over ten years, makes quite a decent investment. Benefits of Investing in Bonds There are a number of benefits associated with bonds as an investment, including the following: Stability Bond prices are generally less volatile than stock prices, which means that they can provide stability for your portfolio. The majority of bonds are issued by governments, which are typically considered stable and less likely to default. Income Bond interest payments can provide you with a source of income. While the coupon rate is rarely as generous for the smaller investment as in our example, investing in multiple bonds with a solid coupon rate can turn into a decent annual income. Diversification Every investor knows that a diversified portfolio can make all the difference. Adding bonds to your portfolio can help to diversify your investments and reduce overall risk. Types of Bonds There are many different bonds, including government bonds, corporate bonds, agency bonds, and municipal bonds. Federal bonds are issued by the Department of the Treasury. There are three different types of bonds issued by the Treasury. Also referred to as "treasuries", these have different names based on the maturity date. Those that have a year or less to maturity are called "bills", while those with up to ten years of maturity are known as "notes". Actual "bonds" are those that have over ten years to maturity. Corporate bonds are often issued by companies that need loans much larger than angel investors, VCs, or banks are willing to provide or cannot find bank loans with favorable terms. Corporations often find it more affordable to issue bonds than to go with bank loans when the interest rates and terms are taken into consideration. Municipal bonds are issued by states and municipalities to fund different projects. Investors will often find bonds with tax-free coupon income. Agency bonds are issued by organizations affiliated with the government, such as Freddie Mac or Fannie Mae. Risks Associated With Bond Investments These investments are not without risk. The biggest risk is for the bond issuer to default on the loan, which could result in the loss of your principal investment. Additionally, bonds are vulnerable to market fluctuations, which leads to price volatility. This is partly linked to the bond’s interest rate, meaning that rising interest rates can cause the price of bonds to fall. Finally, bonds are also subject to credit risk, which is the risk that the issuer will not be able to make interest payments. All in All The most important thing to learn about bonds is the different types of bonds and the risks associated with each type. You should also know your investment goals and objectives. Bonds, as fixed-income securities, can be a good addition to an investment portfolio but aren’t the right option for everyone. Finally, it is important to remember that bonds are subject to market fluctuations, so you should never buy bonds with more money than you can afford to lose.

When setting up a limited liability company or LLC, you’ll need to open a bank account. This is a requirement for every business operating as a separate legal entity from its owner.  In this article, we will cover everything you need to know about opening a bank account for an LLC. We'll discuss the pros and cons, what documents you need, and other important considerations. Why Should Your LLC Have a Designated Bank Account? By forming an LLC, you're essentially declaring that you and your business are separate entities. As such, one of the benefits of having a business bank account as an LLC is that it provides liability protection, shielding your personal assets.  Protecting Yourself if Your Business Gets Sued If your LLC is sued, the plaintiff can only go after the assets of the LLC and not your personal assets. While new businesses generally don’t think about the prospects of being sued, this is the safest route in case something goes south. A separate business account can be especially helpful if you are the sole owner of the LLC. Easy Management of Your Business Finances Another benefit of having a bank account as an LLC is that it simplifies business accounting. Having a separate business bank account for your LLC can make it easier to track expenses and income, both for you and your bookkeeper, which can be helpful come tax season. When the time comes to file your taxes as an LLC, you don’t have to go through the hassle of separating your business and personal transactions within your personal accounts. Small businesses generally have to pay estimated quarterly taxes, and an LLC business bank account is sure to speed up and simplify that process. Looking Professional  Another benefit of having an LLC account is that it makes your business appear more professional. If you are dealing with clients or vendors, they may be more likely to take your business seriously if you have a separate business account. Now that we've discussed the benefits of having an LLC account, let's talk about how to open one. How to Open an LLC Bank Account The first step is to choose a bank. When it comes to choosing a bank for your new business, there are a few things you'll want to keep in mind.  The first thing to figure out is whether you wish to go with an online bank or a brick-and-mortar one. Both solutions have their pros and cons, so make sure the bank offers the services you need. For example, if you need to deposit cash remotely, make sure the bank offers online banking. If you plan on using your LLC bank account to pay bills, make sure the bank has bill pay. Also, make sure to check online reviews on the quality of customer support the bank provides. Another thing to keep in mind when choosing a bank is fees. Some banks charge monthly maintenance fees, while others don't. Overdraft fees also have the tendency to eat into your business profits. Make sure to research the fees associated with different banks before making a decision. You should also check whether the bank of your choosing has other useful components that you can use in the future together with the LLC checking account. For example, if you think you may need a business loan to kickstart your operations, get details about interest rates, loan terms, and revenue requirements. It might also be a good idea to check for different types of accounts available and select a bank that offers all the types you need or might need in the future. How to Choose the Type of Business Bank Account for Your LLC There are a few different types of business accounts that are available to LLCs. The most common type of account is a business checking account. A business checking account and a relevant debit card are a good option for LLCs because they allow you to easily access your money and make payments. Another type of bank account available to LLCs is a savings account. This is a more appropriate option if you want to earn interest on your money or if you want to set aside money for taxes. If none of the aforementioned LLC bank accounts are suitable, you can open a money market account. This is a solid option for LLCs that want to earn interest on their money but still have access to it when they need it. What Documents Do You Need? Before opening an LLC bank account, you'll need to compile a short list of documents. Although different banks have different requirements for those looking to open a bank account for an LLC, there are a few common must-haves.   LLC’s Articles of Organization: In some states, this is referred to as a certificate of formation or a certificate of organization. This is the document that outlines the initial statements concerning the formation of the LLC. You can get this document in the state where your LLC is formed. Government-issued photo ID: You’ll need to provide a valid driver's license, passport, or another type of personal identification when opening a bank account for an LLC. EIN: This is short for Employee Identification Number, and it serves as your LLC’s federal Taxpayer Identification Number that is used by the IRS in the administration of tax laws. The process of opening a bank account for other types of businesses may differ. For example, a sole proprietor needs to provide a Social Security number.    LLC operating agreement: These are documents filed with the state that give the bank the needed information about who has permission to use the account or draw funds from it. In most cases, these documents should be sufficient to open your LLC's bank account. What to Keep in Mind One of the more worrisome aspects for business owners who have employees and wish to set up a business bank account is the danger of losing control over their finances. You should look into your options before you authorize your employees to use the account. Some banks may take advantage of your status as a new business owner, using it as an opportunity to sell you bigger or fancier checks than what's necessary with their special business bank account for LLC introductory offers. Also, be mindful of the minimum monthly balance and similar requirements that could be costly for small businesses. Business Credit Score Another thing to keep in mind when opening a bank account for an LCC is its impact on your business' credit score. Just like you have your individual FICO score, your business will also have one that you'll have to build and maintain.  This score will be used by banks and other lenders to determine your company's creditworthiness in case you need a loan. It will also be evaluated when you are renting office space or searching for a business partner. Unlike personal credit scores that range from 300 to 850, a business credit score typically ranges from zero to 100. Dun & Bradstreet, Experian, and Equifax are the three major bureaus that determine a business credit score.  When you are setting up a bank account for your LLC, make sure you know which bureau the bank reports your transactions to. There is no single algorithm for determining a business credit score, and each of these bureaus will calculate it differently. Another significant difference between a personal and business credit score is its accessibility. You are entitled to a free annual credit report from each of the three bureaus. But business owners that would like to stay informed about their business credit score have to pay for it and specifically order it from one of the three bureaus listed above. It certainly pays off to maintain a good business credit score through your LLC bank account so you can take advantage of loans, insurance policies, and banking terms that are more favorable. All in All The information outlined in our guide will make it easy for you to set up a bank account for your LLC. Just remember to collect all the necessary paperwork and educate yourself about what different banks offer.