Banking at Entry: Debts, Credit, and the Zero-Balance Line

Entering NewVistas is not a wealth test, but it is a credit test. Before a person can launch a Business Enterprise, his or her personal finances have to reach a simple, honest starting line: net worth of zero or better, held there continuously, with only three kinds of debt allowed to remain.

Step one: consolidate

A renter advancing toward Business Enterprise consolidates all consumer debt into one personal credit line at the bank of the community’s working-capital relationship, and holds a debit and a credit card on that same account. The line can be opened no earlier than six months after arrival — six months is a floor, not a guarantee — and the bank requires net worth of zero or better, measured apart from the three excepted debts. The line also carries the cost of preparing the Life Plan and Business Enterprise Plan, together about ten thousand dollars. It is the person’s own, extended against title he or she still holds; the community holds no part of it and assumes no debt.

The three excepted debts

• A home loan, secured on the home.
• Vehicle debt, managed against the vehicle’s value. While walkability and mobility services cannot yet replace a car, the car and its loan stay with the person, and the payment is carried in Owner’s Draw for as long as it is used.
• Education debt, including student and other government-backed loans.

Each carries low-interest, long-term terms an Owner’s Draw can absorb. Medical debt has no exception; it is resolved by negotiation with the provider or, where necessary, bankruptcy.

Education debt stays personal

Education debt is never consolidated, never refinanced, and never assumed or paid by the community. A person carrying it may still take a Business Enterprise; its scheduled payment is simply carried within the household’s Owner’s Draw as a disclosed recurring obligation, and the net-worth test is measured apart from it.

A test of capacity, not capital

For most disciplined participants, reaching zero or better takes a year or two beyond the six-month floor. A person may own nothing beyond a home and a car and carry only the excepted debts. What the gate really tests is capacity — skill, willingness to work, good health, and demonstrated capability, often first shown by subcontracting to an established Business Enterprise in landscaping, contracting, janitorial work, or food service.

At business launch

When the Business Enterprise Plan takes effect and the business is set up, the personal credit line is retired and its balance absorbed into the Business Enterprise’s credit line — an allocation of the community’s working-capital facility. From that day the Enterprise Owner holds no personal credit line and operates entirely through that allocation. The person’s property is held whole in escrow through a trial year; if the Enterprise Owner chooses to exit at its close, the property comes back exactly as contributed, together with the personal line reduced by the principal paid down during the year — a paydown that belongs to the Enterprise Owner. (See Entry, Sponsorship & Exit and Banking in NewVistas.)

Constitution, §4.1, §4.24, and §4.25.