Archive for the ‘bankruptcy information’ Category
admin on December 20th, 2008
If you are thinking of filing for bankruptcy get a free bankruptcy review, or file yourself with our bankruptcy forms for just $19.95. Thanks for visiting!
Bankruptcy filings have increased by 30% over the last year according to statistics from the US Bankruptcy Courts. As of November, over 1 million people have filed for bankruptcy. Although bankruptcy is not the end of the road for the person or corporation filing, it does represent a near final option for many facing financial distress.
Many of those filing bankruptcy this past year have been a direct result of the worsening US economy. Individuals and corporations file for bankruptcy to seek protection from creditors. Bankruptcy can provide a debtor some breathing room while assets are sold to pay creditors or a reorganization of finances is made to repay debts.
The three most common forms of bankruptcy are Chapters 7, 11 and 13. A Chapter 7 bankruptcy provides the filer with a “fresh start” as all debts are satisfied and limited to what can be obtained from the liquidation of the filer’s personal assets. A Chapter 13 bankruptcy is a filing process that will allow a consumer to re-organize debts to repay creditors and possibly maintain possession of various assets to include a primary residence. The Chapter 11 bankruptcy is used by companies seeking to reorganization finances whether assets are liquated or maintained.
The bankruptcy courts expect the growing trend of bankruptcy filings to continue while the nation’s economy is expected to continue to slide as the federal and state governments scramble to cure the financial markets.
admin on December 18th, 2008
The Eastern District Bankruptcy Court in Detroit is preparing itself for the possible bankruptcy filing of General Motors Corp, Ford Motor and Chrysler Motor companies. The Detroit court is reorganizing to become more attractive to the automakers should they decide to file for bankruptcy protection. The White House states its reviewing every option to bailout the top 3 automakers and employers of 2.5 million people. If a bailout is not implemented soon the automakers will be forced to turn to a bankruptcy led solution to their financial woes.
The Detroit court decision to allow the Chief Judge to decide which judge sits over each case is one of the most noticeable changes in the court. However, Detroit courts are known to be union empathetic and not favored by the automakers concerned with honoring costly union contracts during reorganization. New York and Delaware remain the top choices for corporations to file bankruptcy since these courts handle over 60 percent of corporate Chapter 11 bankruptcy filings and usually conduct relatively fast proceedings. In addition, the two jurisdictions have been known to overrule union contracts for reorganizing companies with union representation.
Detroit is the home or neighboring major city to the top 3 automakers and a proponent of the auto union’s agendas. The automakers have remained steadfast on its desire to not file for bankruptcy, but have contracted bankruptcy law firms to plan for such an event. Corporations filing bankruptcy in an area outside of its headquartered state must have a functioning unit in the state it intends to file for bankruptcy.
admin on December 17th, 2008
New Jersey lawmakers, with the support of NJ Governor Corzine, recently passed several economic stimulus bills to combat the state’s growing foreclosure crisis. In November, the state experienced its worst number of foreclosure filings in its history with 5000 homeowners receiving foreclosure notices. The state has allotted for nearly $50 million to address the many fronts of foreclosure.
New Jersey communities across the state are experiencing a tremendous hardship with the loss of homeowners, property tax revenue and community identity with the high rate of foreclosure. New Jersey is using $25 million to make small loans to homeowners and lenders willing to refinance homes threatened by foreclosure with more suitable loan terms. A $15 million allowance will be used to aid non profits groups purchase foreclosing homes. These homes will then be rented back to the foreclosed homeowners to prevent further deterioration of neighborhoods and increased displaced homeowners.
An additional $9 million will be used to provide legal aid to distressed homeowners facing foreclosure, renegotiating of loan terms or confronting debt collections. The new laws and financial aid are being applauded by many because the bills cover all aspects of foreclosure that a homeowner may have to face, from refinancing, to relocation and legal aspects. New Jersey homeowners also have the right to request for up to a 6 month delay of foreclosures to sort out financial affairs.
admin on December 16th, 2008
Companies considering bankruptcy are preemptively filing for Chapter 11 protection because of the difficulty of securing a debtor in possession (DIP) loan. The nation’s financial crisis has made once plentiful credit extensions a thing of the past.
Generally while a company is in bankruptcy, a DIP loan is made while reorganization of the company takes places. Financially strapped companies facing the lack of credit extensions and already over-collateralized assets are filing for bankruptcy before their cash reserves are completely exhausted. Many corporations in Chapter 11 bankruptcy are turning to hedge funds, pension plans and other less traditional money sources for DIP loans. The nation’s corporations have undergone a financing frenzy over the past few years and have reached an unprecedented level of debt. With no assets or cash, corporations could face liquidation in a bankruptcy proceeding. Companies are taking note to jump ahead of the rush and preemptively file bankruptcy as a strategy for the inevitable future, as financial experts predict another wave of financial stress for the nation next year.
admin on December 16th, 2008
The White House has been mulling over options of whether to come to the aid of the top 3 US automakers. Congress narrowly rejected a $14 billion plan to rescue the US automakers and thus prevent either company from filing bankruptcy and potentially going out of business.
General Motors and Chrysler have warned their operations are within weeks of declaring bankrupt. General Motors has begun temporarily closing 20 factories in North America and potentially laying off tens of thousands of employees. The White House is considering to use a portion the $700 billion TARP money for the auto industry rescue, but many critics remain steadfast on the principles that the TARP money was approved for the nation’s financial institutions.
In addition, government officials are concerned that if they make special concessions to bailout the automakers, other companies will operate in a more risky effort to bolster risk adverse profits while viewing the government as a financial safety net. If the White House isn’t able to create an action plan for rescuing the US auto industry soon, a new Democrat heavy congress and white house will be sure to take this issue up at the beginning of the new year. Many argue the auto industry’s approximately 2.5 million employees across the nation are a large enough issue to affect the entire nation and the white house must take action.
