admin on November 24th, 2008
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President –Elect Obama’s economic team is entrenched in the process of developing a rescue plan for US automakers, before he gets into office. The 3 major automakers are facing a financial meltdown and many experts say these behemoth automakers could face being financially broke within months. A financial disaster of the nation’s automakers would put approximately 2.3 million jobs, directly and indirectly tied to the auto industry, in jeopardy.
Although President-Elect Obama’s team of financial experts put together a combination of government loans and bankruptcy protection, Congress will vote again in December on whether to throw the US automaker’s an industry requested lifeline of $25 billion. Some Democratic lawmakers are not excited about a pre-packaged bankruptcy because automakers would have to present a business plan articulating an exit strategy and the automakers are not armed with such plans at this time. Some criticism has come from automakers insisting the various plans are not fully addressing the needs of their cash strapped companies. President –elect Obama’s financial team isn’t in office and stands without actual power until the inauguration, however, they are moving forward with viable options and planning immediately address the nation’s economic issues.
admin on November 21st, 2008
As congress begins to close its door for the remainder of the year, legislators are looking to once again revive a bill next congressional session that will allow bankruptcy judges to rewrite mortgage terms. Allowing bankruptcy judges to rewrite mortgage terms will assist financially woeful homeowners to remain in possession of their home.
This bill was introduced earlier in the year by then Senator Obama but was defeated. However, more Democrats are entering office when congress reconvenes in 2009 and many expect the bill to quickly resurface and likely to be supported by the new President Obama. The current version of the bill isn’t expected to pass, because time is running thin for this session of congress. This latest version of the bill includes restrictions on banks participating in the $700 billion dollars bailout from increasing dividends and regulateing excessive management salaries.
admin on November 21st, 2008
Through out time many people have had to face bankruptcy. Bankruptcy was created to give anyone overburdened by debt and unable to maintain their personal finances, the opportunity to re-start with a clean financial slate. The historical registry of bankruptcy petitioners includes American most notable sons. Among the petitioners for bankruptcy are two of our greatest presidents, Thomas Jefferson and Abraham Lincoln. In fact, Jefferson filed for bankruptcy several times.
The remaining list of bankruptcy petitioners reads like a who’s who of American business icons. The likes of Walt Disney, Milton Hershey, Henry Ford, HJ Heinz and PT Barnum head the list of well-known bankruptcy petitioners. As with any bankruptcy situation, these future icons simple owed more money than they earned and had to seek protection from their creditors via a bankruptcy. The bright side is these industry leaders were able to re-organize and repay their debts and move forward to the greatness.
admin on November 21st, 2008
The increase of home foreclosures has created a plethora of fraudulent foreclosure prevention companies popping up across the nation. In addition, overwhelming reports are recorded of homeowners paying exorbitant upfront contract fees only to later discovery no one has spoken to the mortgage company on their behalf. This unfortunate surge of fraudulent activity has prompted the State of Illinois to pass legislation regulating these foreclosure consultant companies.
Recently, the Illinois Attorney General filed suit against more than a half of dozen firms promoting foreclosure prevention services. These firms crossed the legal line of operation by charging up front fees and for failure to clearly define their services and manners of foreclosure mitigation on its agreement contracts. Additionally, the Illinois law states the distressed homeowner should be able to back out of the contract anytime without cause. The Illinois law was created to prevent these firms from preying on stressed and anxious defaulting homeowners.
admin on November 19th, 2008
President – elect Obama spoke on whether a bankruptcy or government bailout would be the best option for the US automakers and the nation’s economy. Obama thought automakers’ management, labor unions, creditors and all other stakeholders will need to be involved in a collective effort to avert the automakers’ predicted catastrophe. If US automakers declared bankruptcy, there would still be a need for government involvement in the form of a debt guarantee. This guarantee may encourage the banks to start lending to the cash strapped auto industry again.
Obama referenced the past accomplishments of US airlines. In previous economic crisis, the US airlines were able to rise from bankruptcy, more apt to perform on a profitable level. The idea that a chapter 11 bankruptcy may shepherd a financially healthier US automaker is being heavily debated by advisors and federal legislators. However, the government should prepare itself to establish a leadership role during the restructuring of the auto industry finances regardless of a bailout or bankruptcy.
