THE RECESSION: ARE YOU OR YOUR BUSINESS UNDER PRESSURE?

Unfortunately, we are in the midst of a deepening and very harsh recession, with further hardships to be endured before we turn the corner. Undoubtedly, there will be casualties, with business folding, significant job losses, large drops in income, less money around, incomes across the economy cut, and households struggling to make ends meet.

These alone are huge pressures but also there will be additional perceived pressures. If a business or indeed a household is under pressure the first signs are picked up on by their banks, payments missed, overdraft limits being pushed out, more regular breeches of overdraft, less being lodged to account, etc – these are all tell tale signs. What do I do when I feel that we are taking water, when credit is going to dry up and income also reducing and the problems are threatening to get worse?

Well here are a few Dos and Don’ts:

DON’T:
• Stick your head in the sand and pretend the problem will go away
• Take on more borrowings without proper advice
• Avoid creditors, ignore post or phone calls
• Make false promises or spin stories to keep creditors or banks at bay.

DO:
• Communicate, Communicate and Communicate with your banks and creditors
• Once Difficulties become apparent advise your creditors immediately
• Be truthful and upfront regarding your difficulties
• Only make realistic commitments -- ones that you know you can honour
• Seek help --- get a trusted adviser
• If you are unable to meet the banks or feel that you are at a dis- advantage have an adviser intercede on your behalf and make the necessary negotiations
• Initiate the first meeting

There will undoubtedly be casualties and if you are unfortunately one of them, remember this recession will abate and the very corrective actions that you take now in adversity, will determine how you and your family’s prospects and standing when you emerge from this dark period. It is important to remember that people will find themselves in this seemingly awful situation through no fault of their own. The problems facing people and businesses will not go away on their own, however by facing up to them and addressing them at the earliest possible stage, positive effects will a c c r u e . Remember, the Banks cannot bleed a stone and to some extent they lent the money and some responsibility must attach to them. Also, it is not in their interests to pursue debtors vigorously as quite likely the value of their security is less than the loan value and it does not make business sense for them to appear to be bullies in the matter. There is a value in having somebody in the corner with you, who can intercede on your behalf and deal effectively with the banks. In addition by sharing the problem you are no longer isolated and then you start thinking positively and dealing with the issues in a positive manner.

Get Help.
Do not isolate yourself or your family.

HEALTH INSURANCE
Shop around there are huge savings

VHI up 23%, and Quinn Life up 16%
Hibernian Aviva Health no increase
Basic Family package of 2 adults and 2 children equivalent to Plan B are set out with increases kicking in to renewals after 1st Jan 09

Cover for Families from 1st Jan 09

Hibernian We level 2 €1,608
Quinn Essential Plus €1,978
VHI Plan B €2,256

Switching between health insurers is easy and can be done at any time – not just at renewal. Benefits under each insurer are more or less the same and should be compared to determine value. If your VHI is up for renewal in 09 you can switch now and lock in Hibernian rate for the next 12 months – why wait.

Jim O Kelly QFA,CEB, BFS. Jim O Kelly is executive director and sole proprietary owner of Benchmark Financial Services BMW Ltd, The Square, Ballaghaderreen. Jim Has 30 years experience in the Financial Services industry and has an Hons degree in Financial Services from UCD. Jim also holds Diplomas in Investment Advice and Wealth Management and is a member of both The Institute of Bankers in Ireland and Professional Insurance Brokers Assoc