.jpg)
Formula for calculating present value of a promissory note owed
Ah, that's what I was trying to get at but couldn't quite articulate!
I want the number to be as low as realistically possible.
On Tuesday, September 3, 2013, Michael Avanesian wrote:
> **
>
>
> At 10% it's $78,441.97.
>
> That's not how I would lawyer it though. I would look at the facts to see
> what someone else on the market would pay for it given the likelihood of
> collection.
>
> If the person who owes your client money has very few assets and a shaky
> work history, how much can you expect an investor to buy it for?
>
> You have a note worth 100k in 5 years.
>
> The investor probably wants a 20% return and he'll offset that risk by
> another 10% if you're lucky (so 30% total return/year).
>
> At 30%, the note is worth $51,514.22. I don't think investors would be
> interested in buying this note even at 30% unless the obligor has a stellar
> credit score and good work history. It's going to take this investor 2.5
> years just to break even.
>
> There is another issue here that a legit investor would have to worry
> about. That is, he's paid 51k for a note worth 78k. Assuming the purchaser
> is not a relative of the borrower and no modification is made, the 27k
> profit is going to be taxed as regular income over 5 years at about 44%
> (whether actually paid or not!). So you have a lot of room to play with
> this number.
>
>
> Sincerely,
> Michael Avanesian
> Law Offices of David A. Tilem
> www.tilemlaw.com
> 818-507-6000
>
>
> On Tue, Sep 3, 2013 at 2:04 PM, Giovanni Orantes wrote:
>
> **
>
>
> Well, that is always the contingency. Using a 4.25% discount rate, the
> present value of such a stream of income is $89,946.03.
>
>
> On Tue, Sep 3, 2013 at 1:27 PM, Holly Roark wrote:
>
> **
>
>
> $1,666.66/ month for 60 months. It's uncertain because it's dependent upon
> the debtor's debtor being able to make the payments and if debtor's debtor
> files BK there is no collateral for the debt so it could be wiped out.
>
>
> On Tuesday, September 3, 2013, Giovanni Orantes wrote:
>
> **
>
>
> Here you go:
>
>
>
>
>
> If you don't wanna work with that: How is it going to be paid? Monthly?
> How much each month? How is it uncertain?
>
>
> On Tue, Sep 3, 2013 at 12:56 PM, Holly Roark wrote:
>
> **
>
>
> Debtor has a promissory note with a face value of $100,000. The interest
> is already incorporated into it. The $100,000 is to be paid over five years
> to debtor. Of course it is uncertain whether the person will pay debtor on
> the note. If debtor files chapter 13, I need to be able to value this
> asset. Since it is uncertain and is to be paid over five years, is there a
> formula to calculate the present value of this asset so I can exempt some
> or all of it under the wild card?
>
> Please direct me to the appropriate formula. Thank you.
>
>
>
>
> --
> Holly Roark
> Certified Bankruptcy Specialist*
> holly@roarklawoffices.com **primary email address**
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
> *By State Bar of California Board of Legal Specialization
>
>
> **For a quicker response, email me at holly@roarklawoffices.com.
> I only use gmail for my listservs, and am likely to miss private emails
> directed to my gmail account.**
>
>
>
>
>
> --
> Giovanni Orantes, Esq.
> Certified Bankruptcy Specialist*
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 2920
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
> *Board Certified - Business Bankruptcy Law - American Board of
> Certification
> *Board Certified - Consumer Bankruptcy Law - American Board of
> Certification
>
> WE ARE A "D
>
>
>
Holly Roark
Certified Bankruptcy Specialist*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal Specialization
**For a quicker response, email me at holly@roarklawoffices.com.
I only use gmail for my listservs, and am likely to miss private emails
directed to my gmail account.**
The post was migrated from Yahoo.
That's not teaching me to fish, Giovanni. How'd you get that number?
On Tuesday, September 3, 2013, Giovanni Orantes wrote:
> **
>
>
> Well, that is always the contingency. Using a 4.25% discount rate, the
> present value of such a stream of income is $89,946.03.
>
>
> On Tue, Sep 3, 2013 at 1:27 PM, Holly Roark wrote:
>
> **
>
>
> $1,666.66/ month for 60 months. It's uncertain because it's dependent upon
> the debtor's debtor being able to make the payments and if debtor's debtor
> files BK there is no collateral for the debt so it could be wiped out.
>
>
> On Tuesday, September 3, 2013, Giovanni Orantes wrote:
>
> **
>
>
> Here you go:
>
>
>
>
>
> If you don't wanna work with that: How is it going to be paid? Monthly?
> How much each month? How is it uncertain?
>
>
> On Tue, Sep 3, 2013 at 12:56 PM, Holly Roark wrote:
>
> **
>
>
> Debtor has a promissory note with a face value of $100,000. The interest
> is already incorporated into it. The $100,000 is to be paid over five years
> to debtor. Of course it is uncertain whether the person will pay debtor on
> the note. If debtor files chapter 13, I need to be able to value this
> asset. Since it is uncertain and is to be paid over five years, is there a
> formula to calculate the present value of this asset so I can exempt some
> or all of it under the wild card?
>
> Please direct me to the appropriate formula. Thank you.
>
>
>
>
> --
> Holly Roark
> Certified Bankruptcy Specialist*
> holly@roarklawoffices.com **primary email address**
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
> *By State Bar of California Board of Legal Specialization
>
>
> **For a quicker response, email me at holly@roarklawoffices.com.
> I only use gmail for my listservs, and am likely to miss private emails
> directed to my gmail account.**
>
>
>
>
>
> --
> Giovanni Orantes, Esq.
> Certified Bankruptcy Specialist*
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 2920
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
> *Board Certified - Business Bankruptcy Law - American Board of
> Certification
> *Board Certified - Consumer Bankruptcy Law - American Board of
> Certification
>
> WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
>
> SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
> AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
>
> Note: The information contained in this e-mail message is confidential
> information intended only for the use of the individual or entity named. If
> the reader of this message is not the intended recipient or an agent
> responsible for delivering it to the intended recipient, you are hereby
> notified that any dissemination, distribution or copy of this com
>
>
>
Holly Roark
Certified Bankruptcy Specialist*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal Specialization
**For a quicker response, email me at holly@roarklawoffices.com.
I only use gmail for my listservs, and am likely to miss private emails
directed to my gmail account.**
The post was migrated from Yahoo.
$1,666.66/ month for 60 months. It's uncertain because it's dependent upon
the debtor's debtor being able to make the payments and if debtor's debtor
files BK there is no collateral for the debt so it could be wiped out.
On Tuesday, September 3, 2013, Giovanni Orantes wrote:
> **
>
>
> Here you go:
>
>
>
>
>
> If you don't wanna work with that: How is it going to be paid? Monthly?
> How much each month? How is it uncertain?
>
>
> On Tue, Sep 3, 2013 at 12:56 PM, Holly Roark > wrote:
>
>> **
>>
>>
>> Debtor has a promissory note with a face value of $100,000. The interest
>> is already incorporated into it. The $100,000 is to be paid over five years
>> to debtor. Of course it is uncertain whether the person will pay debtor on
>> the note. If debtor files chapter 13, I need to be able to value this
>> asset. Since it is uncertain and is to be paid over five years, is there a
>> formula to calculate the present value of this asset so I can exempt some
>> or all of it under the wild card?
>>
>> Please direct me to the appropriate formula. Thank you.
>>
>>
>>
>>
>> --
>> Holly Roark
>> Certified Bankruptcy Specialist*
>> holly@roarklawoffices.com > 'holly@roarklawoffices.com');> **primary email address**
>> www.roarklawoffices.com
>> Central District of California
>> Consumer Bankruptcy Attorney
>> 1875 Century Park East, Suite 600
>> Los Angeles, CA 90067
>> T (310) 553-2600
>> F (310) 553-2601
>>
>> *By State Bar of California Board of Legal Specialization
>>
>>
>> **For a quicker response, email me at holly@roarklawoffices.com.
>>
>> I only use gmail for my listservs, and am likely to miss private emails
>> directed to my gmail account.**
>>
>>
>>
>
>
> --
> Giovanni Orantes, Esq.
> Certified Bankruptcy Specialist*
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 2920
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
> *Board Certified - Business Bankruptcy Law - American Board of
> Certification
> *Board Certified - Consumer Bankruptcy Law - American Board of
> Certification
>
> WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
>
> SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
> AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
>
> Note: The information contained in this e-mail message is confidential
> information intended only for the use of the individual or entity named. If
> the reader of this message is not the intended recipient or an agent
> responsible for delivering it to the intended recipient, you are hereby
> notified that any dissemination, distribution or copy of this communication
> is strictly prohibited. If you have received this communication in error,
> please immediately notify us by telephone or e-mail and delete the original
> e-mail at (213) 389-4362 or (888) 619-8222.
>
> IRS Circular 230 Disclosure: In order to comply with requirements imposed
> by the Internal Revenue Service, we inform you that any U.S. tax advice
> contained in this communication (including any attachments) is not intended
> to be used, and cannot be used, for the purpose of (i) avoiding penalties
> under the Internal Revenue Code or (ii) promoting, marketing, or
> recommending to another party any transaction or matter addressed herein.
>
>
>
Holly Roark
Certified Bankruptcy Specialist*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal Specialization
**For a quicker response, email me at holly@roarklawoffices.com.
I only use gmail for my listservs, and am likely to miss private emails
directed to my gmail account.**
The post was migrated from Yahoo.