March 17, 2023, midnight

Financial distress is a common condition for companies and persons as some people may expose to such a problem as a result of different factors, and the companies as well. But do you know the procedures that should be taken to face this distress in order not to face legal problems?

In the following lines, we will know more about the concept of “financial distress” and the most important procedures taken when persons and institutions face such a problem.

Financial distress

It is one of the circumstances that persons and institutions of all kinds may face at any time.

At this condition, the institution can not pay its financial commitments or may face difficulty in payment. The reasons for that vary to reach to such a condition in companies, maybe because of high costs or problems in revenue and assets of the institution as it reaches the end of financial distress.

As for people, it may happen for many reasons. The most important reason is bad financial management, and not solving financial problems may expose the person to legal liability and face a lot of legal problems.

Financial distress in loans payment

This condition in payment loans to financial agencies of all kinds is common between people and institutions and may expose them to many problems, and the main reasons for that matter are the following:

* Having a loan whose installments exceed the monthly income of the person may expose him to financial distress in payment and as a result facing legal problems.

* No good financial management for people of institutions.

* Not using financial calculators before getting loans.

* Not identifying the purpose of finance before getting the loan as this step is very essential for people and institutions.

Importance of knowing procedures taken in financial distress cases

It is very important to know these procedures as it avoids your legal liability and be more aware of the steps you should do when exposed to a financial crisis that prevents you from payment.

The Saudi Central Bank SAMA represents the required procedures should be followed through the official website from the following link “possible financial distress loan management rules”.

How to run your loans perfectly?

When you think of getting a loan whether, for a person or an institution, you should do the following steps:

* Identifying the purpose of the loan: First, you should identify the main purpose of the loan, it may be not for one purpose but you may need the loan for many purposes. This identification is the best way to manage it perfectly.

* Specifying the value of the loan: after identifying the purpose, you will be able to calculate the average value of the finance you will get.

* Using the finance calculator: its mission is to ease calculating the value of monthly installments and number of the months and years of payment. Moreover, the calculation of the annual Flat rate of your own finance.

* Applying loan request to a trusted agency: now is the step of choosing the best company to get the finance, all you have to do is to choose a trusted licensed agency such as Tayseer Company for finance. Tayseer Company offers loans compatible with Islamic laws and gives the best financial solutions whether for personal or institutional finance.

Knowing the procedures for financial distress cases is a very important matter and studying your own finance is so important as well before getting your next loan in order not to expose to such a thing.