admin on March 11th, 2009
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!
It’s beginning to appear that in this time of economic crisis, declaring personal bankruptcy has become a viable option for more people than ever before. As a result, it is losing its historical stigma due, in part, to the reality that we all probably now know more people than ever before who have done so. And we are more understanding.
With unemployment accelerating at a pace not seen in decades while the real estate market continues to flounder, the economy is faced with the reality that today, more people are just relinquishing their homes and other worldly possessions instead of working out a debt repayment plan in bankruptcy courts across the nation.
Several experts in the credit counseling and bankruptcy profession recognize the attitude change as being a byproduct of the current economic conditions. Historically, bankruptcy has been looked-upon as a personal failure.
Chapter 7 bankruptcy filings for individuals are up more than 25% for the first three-quarters of 2008. This, alarmingly, is in comparison than the entirety of the year 2007. (Chapter 7 Bankruptcy liquidates the assets and turns them into cash for creditors.)
Conversely, Chapter 13 bankruptcy filings have plummeted from 42% of all personal bankruptcies in 2006 to a level of 25% through three-quarters of 2008. (Chapter 13 Bankruptcy allows the client to keep the assets through a repayment plan with creditors.)
This increase in Chapter 7 filings comes despite the 2005 change in the federal bankruptcy code in making it harder to qualify for liquidation-style bankruptcy in an effort to encourage Chapter 13 filings, which forgive less debt and require payment plans in most cases.
People have resigned themselves to their own personal reality. This has become a fact of life for many people. In the past, folks had a sense of urgency and a strong desire to do whatever it takes to keep their homes. Today, people are simply walking away… tossing the keys to the home inside… packing up their belongings and telling the mortgage companies, “Come and take it. We’re done here.” Why is that? Quite simply, no matter how much they scrimp, save, and fight - when the sun goes down, they’re still significantly “upside down” on their mortgages.
More people are becoming eligible to file bankruptcy, incomes are sinking, work hours are being cut-back, and too many are simply being laid-off. There are drawbacks to both the consumer and the community. Neighborhoods will be affected negatively for a long time as bankruptcies and foreclosures continue to accelerate with no end in sight.
admin on February 18th, 2009
Obama announced his plans to help 9 million Americans save their homes in Mesa Arizona today. According to the NY Times, the plan consists of three objectives:
* The first will help homeowners that are current on their mortgages but paying high interest rates and can’t refinance due to lack of equity or upside down loans.
* The second component will help those at risk of foreclosure by providing incentives for lenders to negotiate the terms of the mortgage to lower payments.
* The third component will ensure credit is available for new loans for buyers by giving another $200 billion in financing to Fannie Mae and Freddie Mac
Obama’s plan goes into affect on March 4th which is when all the details will be available for review. The plan gives $75 billion for loan modifications to reduce payments to 31 percent of the borrowers gross monthly income, but if the lenders believe the incentives will cost them more than going through the foreclosure process as normal, they may not agree with the modifications. Part of the plan, which will have to be voted into law, also calls for allowing bankruptcy trustees to change mortgages during the bankruptcy process, giving borrowers more options to keep their home.
The Obama housing plan is not expected to stop all foreclosures including those who bought knowing they could never make the payments, or investors who bought in order to flip the property for a higher price.
admin on February 17th, 2009
Just four days after Donald Trump resigned as chairman of the board, Trump Entertainment Resorts filed bankruptcy in Camden, NJ. Donald Trump had offered to buy the company to save it from bankruptcy and make it a private company, but the board refused the offer, instead determining that bankruptcy was a better option.
The Trump Casino’s listed over $1 billion in debts, with just over $2 billion in assets on the bankruptcy petition. The casinos will operate during the bankruptcy proceedings, the third time the company has been through the bankruptcy process. The sales of Trump Marina, one of the three casinos under the Trump Entertainment Resorts umbrella, is supposed to take place as planned to Richard Fields who is a former protege of Donald Trump.
admin on January 12th, 2009
In a recent caucus by Congressional Democrats to discuss an economic stimulus plan, a former Labor Secretary said that homeowners should be able to write down the value of their primary residence in bankruptcy court. Currently, only leased investment properties may be devalued by the bankruptcy courts and re-amortized to meet the market’s current conditions and the borrower’s ability to pay.
The nation’s homeowners have seen their property values drop as much as 40% since the start of the economic decline nearly 2 years ago. Over a million homeowners lost their homes in 2007, while bankruptcy courts adjusted the mortgages, to an affordable level, on investment properties for real estate investors. Banks are steadfastly against such a measure in bankruptcy courts, but may agree if the measure includes financial assistance from the remaining $350 billion TARP bailout fund.
Last month, Chairman of the House Financial Services Committee, US Representative Barney Frank (D-MA), threatened to hold up allocation of any additional TARP funds if at least a portion of the funds were not used to aid defaulting homeowners
admin on January 9th, 2009
Expert financial analysts predict the world’s corporate earnings will continue to decline for a least the first half of 2009. Several financial management houses rated various industries and believe that Standard & Poor’s 500 will experience a 9% decrease in its earnings by mid year. Several top brands and companies have declared bankruptcy in 2008 and bankruptcy law firms are seeing an increase corporate demand for bankruptcy contingency consulting.
The energy and retail industries are expected to the hardest hit in 2009, with profits expected to decline by more than 20%. As a result of these industry losses the European and Asia markets will be driven further into an economic recession, titling this economic period the first time Europe, Japan and the US have simultaneously been in an economic recession since World War II.
