Method, software program, and system for managing debt

• US 7,373,328 B1
• Filed: 06/29/2001
• Issued: 05/13/2008
• Est. Priority Date: 11/28/2000
• Status: Expired due to Term

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Butcher, III, George H.
• Primary Examiner(s): Poinvil, Frantzy
• Assistant Examiner(s): Graham, Clement
• Application Number:
  US09/896,630
• Time in Patent Office: 2,510 Days
• Field of Search: 705/37, 705/34, 705/38, 705/30, 705/36, 705/39
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

In one embodiment, a method for managing variable rate debt in the form of at least one credit issued by a borrower, comprising: budgeting for interest owed on the variable rate debt by the borrower during a time period when an interest rate on the variable rate debt is below a first predetermined low interest rate level; applying at least a portion of any existing current budgetary excess by the borrower to reduce future interest rate risk by performing at least one of i) the early retirement of principal associated with the variable rate debt and ii) the funding of a sinking fund; and applying at least a portion of any accumulated budgetary excess by the borrower during a time period when the interest rate is above a first predetermined high interest rate level to reduce an amount of debt service. A corresponding software program and system are also disclosed.

Claims

1. A method for managing variable rate debt issued by a borrower, comprising:

requiring the borrower to budget for interest owed by the borrower on the variable rate debt during a time period when an interest rate on the variable rate debt is below a first predetermined low interest rate level;

requiring the borrower to apply at least a portion of any existing current budgetary excess of the borrower to reduce future interest rate risk by performing at least one of;

i) the early retirement of principal associated with the variable rate debt; and

ii) the funding of a sinking fund; and

requiring the borrower to apply at least a portion of any accumulated budgetary excess of the borrower during a time period when the interest rate is above a first predetermined high interest rate level to reduce an amount of debt service on the variable rate debt.

2. The method of claim 1, further comprising the step of requiring the borrower to extend a principal amortization period associated with the variable rate debt to maintain the amount of debt service below a predetermined debt service level during the time period when the interest rate is above a second predetermined high interest rate level and the impact of the performance of at least one of:

i) the early retirement of principal; and

ii) the application to principal and interest of amounts available in the sinking fund is not sufficient to avoid an increase in the amount of debt service above the predetermined debt service level, wherein the first predetermined high interest rate level and second predetermined high interest rate level are selected from the group of;

i) different levels; and

ii) the same levels.

3. The method of claim 1, further comprising the step of requiring the borrower to reduce a principal amortization period associated with the variable rate debt during the time period when the interest rate is below a second predetermined low interest rate level, wherein the first predetermined low interest rate level and second predetermined low interest rate level are selected from the group of:

i) different levels; and

ii) the same levels.