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How Do Creditors Get Paid In A Chapter 13 Bankruptcy?

How Do Creditors Get Paid In A Chapter 13 Bankruptcy? When a Chapter 13 bankruptcy plan is created there is an even number of payments required over a certain number of years. For example, a debtor may be required to make payments of $536 per month for five years via Chapter 13 bankruptcy. But just because there is an even number of payments does not mean that all creditors are paid the same amount at the same time. Chapter 13 bankruptcy repayment plans prioritize debts with those having the highest priority receiving repayment first. Secured debts such as taxes and mortgages are priority debts and will get paid off before unsecured debts such as credit card debts and payday loans. And even if a debtor pays off one of their secured creditors first, such as delinquent taxes, that will not change how much the debtor is required to pay into the Chapter 13 bankruptcy case every month, it will only mean that the other creditors will be paid a higher amount. For example, if a debtor pays off their taxes, then their delinquent mortgage debt may receive more money every month and eventually after it is paid off the next debt in line may receive more money every month and so on until the plan is completed. There are some instances when a debt is split—meaning that it consists of both secured and unsecured portions. This often happens when the property secured by the loan is worth less than the debt. For example, if a Chapter 13 bankruptcy case consists of a vehicle with a $10,000 debt and the car is only worth $6,000, then the $4,000 portion of the loan is not secured. Once the Chapter 13 Bankruptcy is completed, the unsecured portion of the car loan will be discharge. But if the debtor does not complete the Chapter 13 bankruptcy or misses even one payment even after the secured portion of the loan is paid they could lose that car to repossession. This is why it is so important to complete your Chapter 13 bankruptcy or convert it to Chapter 7 bankruptcy if you cannot make payments due to a change in finances.

Source: Reed's Bankruptcy Blog | 29 Jul 2010 | 10:40 am

Warren Reaches Out to Lobbyists, Republicans in Charm Campaign

Liberal activists who champion Harvard law professor Elizabeth Warren to lead the new consumer financial bureau have picked up endorsements from lawmakers, political websites and newspaper editorials. Their success may depend on whether a quieter campaign Warren has been waging can win over detractors.

Source: Yahoo! News Search Results for law bankruptcy | 29 Jul 2010 | 10:35 am

Consumer Advocate Warren Reaches Out to Banks, Senators in Quest for Post

Supporters of Harvard law professor Elizabeth Warren to lead the new consumer financial bureau have picked up endorsements from lawmakers, political websites and newspaper editorials. Their success may depend on whether a quieter campaign Warren has been waging can win over detractors.

Source: Yahoo! News Search Results for law bankruptcy | 29 Jul 2010 | 10:23 am

Hecker Loses Bankruptcy Claim Faces New Criminal Charges

Hecker Loses Bankruptcy Claim Faces New Criminal Charges Denny Hecker, former auto tycoon, lost his claim to a $1 million consulting fee in bankruptcy court and now faces new criminal charges in a fresh federal indictment. Bankruptcy Judge Robert Kressel dissolved Hecker’s interest in a consulting deal with Midwest Motors after the company sought to end the relationship with Hecker because of the bad publicity surrounded the embroiled former auto tycoon. The bankruptcy judge said that Midwest Motors had good cause to terminate the consulting agreement because of bad publicity.

Bankruptcy trustee Randy Seaver has objected to the fee for nearly a year, saying the money should go to Hecker’s creditors. Seaver recently reached a settlement in which Midwest Motors agreed to pay $65,000 to the trustee and about $425,000 to creditors Chrysler Financial and Toyota Financial Savings Bank. Hecker had objected.

But the loss of the consulting fee in bankruptcy is only the beginning of Hecker’s financial and legal woes. The former auto tycoon is now facing additional criminal charges including 26 conspiracy, bankruptcy and wire fraud charges stemming from accusations that he orchestrated various schemes to defraud Chrysler Financial and other lenders out of hundreds of millions of dollar in auto loans. The new indictment accuses Hecker of illegally concealing and transferring money prior to filing bankruptcy. According to the indictment, Hecker failed to disclose the purchase of $10,425 in gift cards.

The new criminal charge is just one more thing added to the long list of legal accusations added to Hecker’s criminal case. If convicted of the bankruptcy fraud charges, Hecker could face up to ten years in prison.

Source: Reed's Bankruptcy Blog | 29 Jul 2010 | 7:35 am

American Safety Razor, Lehman, Innkeepers, AbitibiBowater: Bankruptcy

American Safety Razor Co. , the fourth-largest maker of wet-shaving blades, filed a Chapter 11 petition yesterday where the company will be sold to first-lien lenders in exchange for debt unless second-lien creditors make arrangements to pay off the senior creditors within seven weeks.

Source: Yahoo! News Search Results for law bankruptcy | 29 Jul 2010 | 12:24 am

Movie Gallery To Liquidate In Bankruptcy

Movie Gallery To Liquidate In Bankruptcy Movie Gallery Inc. the operator of the Hollywood Video rental chain has filed a plan with a federal bankruptcy court to liquidate its operations and shut down. The move comes five months after Movie Gallery filed for Chapter 11 bankruptcy for the second time in three years. Initially, Movie Gallery had planned to use Chapter 11 bankruptcy to close one-third of its 2,415 U.S. stores and continue operating; but recently decided to liquidate in bankruptcy after defaulting on a loan.

According to the plan filed Tuesday evening, unsecured creditors will obtain “some recovery” on their claims, even though “many” secured creditors, whose claims are more senior, “will not be paid in full.”

A disclosure statement, which typically details the size of expected recoveries, has yet to be filed with the court.

Movie Gallery suffered plummeting sales and operating losses after suffering stiff competition from mail-order and kiosk movie rental companies such as Netflix and Redbox. But even after filing Chapter 11 bankruptcy twice in the past three years the movie rental company was not able to survive and compete effectively. Since the company has decided to liquidate their assets in bankruptcy and shut down operations, all of their assets will be sold and the proceeds will be used to repay creditors. As has been suggested, many of the company’s secured creditors will not receive full payment even while their unsecured creditors recoup at least some of their losses. But because the disclosure statement has not been released the details of how creditors will be paid is still a mystery.

Source: Reed's Bankruptcy Blog | 28 Jul 2010 | 9:37 pm

Rich Lose Their Jets To Repossession

Rich Lose Their Jets To Repossession The economy isn’t getting better as many have guessed by now, but the pain does seem to be spreading to even the wealthiest among us. Many repossession agents are reporting that the retaking of private planes has increased dramatically as many wealthy individuals run out of cash needed to maintain and operate them.. Some of the jets, worth more than $20 million are in poor shape after sitting idle for months. The owners of these airplanes facing repossession include corporations and affluent individuals who have fallen on hard times and have decided to put their jets on the back burner to deal with more pressing financial issues. And many lenders and repo-men specializing in the repossession of private plans say that their business is set to increase in volume this year.

“The small, single-engine Cessnas and Pipers are being repossessed all the way on up to 747s,” says Terence Haglund, founder of the Aviation Law Center, who represents many lenders. “It’s definitely recession-related, and it’s been increasing for the last couple of years.”

But unfortunately for the lenders hoping to repossesses the private plane and auction it off to make back some of the defaulted loan, many of the planes are worth only a fraction of what the owners paid for them originally. In what seems to be aviation’s own upside-down lending crisis, many of the jets and small airplanes have lost significant value since the recession began. And to top it off, there aren’t many lenders willing to grant many a loan to finance an airplane.

Source: Reed's Bankruptcy Blog | 28 Jul 2010 | 8:37 pm

Foreclosure Crisis Pushes Renters Into Homelessness

Foreclosure Crisis Pushes Renters Into Homelessness Despite the enactment of the Protecting Tenants at Foreclosure Act of 2009 (”PTFA”), which provides important federal protections for tenants in foreclosed properties, many renters are still being unfairly evicted after foreclosure according to a report released by the National Low Income Housing Coalition. PTFA, which was suppose to guarantee that renters received at least a 90 day notice before being evicted because of a foreclosure, the report said that many are being evicted without notice and that 40 percent of the families evicted because of foreclosure are renters.

Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty said, “Renters are losing their homes through no fault of their own. Already, the foreclosure crisis has lead to a dramatic rise in U.S. homelessness. Laws like the Protecting Tenants at Foreclosure Act, when properly implemented and enforced, are essential to preventing those renters from becoming homeless.”

Some renter advocates are suggesting that states enforce tougher rules regarding the eviction of renters after a foreclosure. Because the foreclosure crisis is decimating the amount of affordable rental property available, some advocates say that those who acquire properties through foreclosure should be required to serve as landlords and even offer lease renewals to existing tenants while maintaining affordable rent. Of course lenders and investors balk at such suggestions saying that they should not face any such restrictions after a foreclosure and that they have a right to claim and repurpose the foreclosed property as they see fit. However, we are not talking about just a few foreclosures here; we are talking about foreclosures on a mass scale that is disproportionately impacting the most vulnerable populations in our society. Maybe we should seriously consider placing safeguards to prevent the renters from facing homelessness because of a foreclosure.

Source: Reed's Bankruptcy Blog | 28 Jul 2010 | 4:21 pm

Rothstein bankruptcy attorneys sue state GOP for $237,000 in ponzi money

The attorneys handling Ponzi schemer Scott Rothsteins bankrupt law firm filed a clawback suit Wednesday against the Republican Party of Florida, seeking the return of nearly a quarter-million dollars.

Source: Yahoo! News Search Results for law bankruptcy | 28 Jul 2010 | 3:25 pm

Florida GOP sued for donations from Scott Rothstein's law firm

The lawsuit was filed by Berger Singerman, the law firm working on behalf of the trustee in the bankruptcy case for Rothstein Rosenfeldt Adler. The trustee sent a demand letter to the party in April, but ``the defendant has failed and refused to make such repayment,'' the lawsuit states.

Source: Yahoo! News Search Results for law bankruptcy | 28 Jul 2010 | 2:47 pm

Do You Qualify For A Mortgage Modification?

Do You Qualify For A Mortgage Modification? Are you facing foreclosure and hoping to get a mortgage modification? If so, there are few things that you need to know. While the mortgage modification program has been promoted as the fix-it all of the foreclosure, the reality is that only a small number of homeowners have successfully been placed in long-term mortgage modifications. Many homeowners facing foreclosure find that even after months of waiting for a mortgage modification approval they are still faced with losing their home in a foreclosure auction sale. Some of those homeowners eventually file bankruptcy in an effort to avoid foreclosure and remain in their home. If you are trying to get a home mortgage modification, find out if you qualify or not before you spend months waiting for the bank to respond. Below are a few questions you should answer before going through the process:

Is the home you want a mortgage modification on your primary residence? In order for a homeowner to qualify for a mortgage modification and avoid foreclosure, they must be living in the home and it must be their primary residence. In other words, rental properties don’t qualify.
Was the mortgage on the home taken out before January 1, 2009? Only mortgages issued before January 1, 2009 will qualify for the mortgage modification program.
Is the mortgage (including second mortgages) less than $729,750? If so, you may qualify for a mortgage modification and be able to avoid foreclosure.
Do you have enough income to pay for a modified mortgage? Before actually working through the mortgage servicer you will only be able to guesstimate whether or not you can afford your modified mortgage. However, if you have no income then the answer is probably no.

Source: Reed's Bankruptcy Blog | 28 Jul 2010 | 2:03 pm

Fox Law Office Launches Pro Bono Bankruptcy Attorney Services Program

A Meaningful Bankruptcy Law Practice Involves Much More Than Appearing in Court or Filling out Forms. That is Why Today The Fox Law Office Announced Its Pro Bono Bankruptcy Services Program Aimed at Helping the People in Santa Clara County Who Need Help the Most but Are Least Able to Pay.

Source: Yahoo! News Search Results for law bankruptcy | 28 Jul 2010 | 2:00 pm

Bankruptcy filings in state up 16% at midyear

Bankruptcy filings in Wisconsin rose 16% during the first half of this year, an increase lawyers say was driven largely by consumers and small-business operators who couldn't find enough work in the slow economy to keep up with their debts.

Source: Yahoo! News Search Results for law bankruptcy | 28 Jul 2010 | 11:40 am

Corporate/Company Law

Which law applies is a question that must be addressed early in relation to any insolvency issues or process. Where a company is incorporated in Scotland the Scottish courts will have jurisdiction in relation to the insolvency process and the Scottish Insolvency Rules will apply.

Source: Yahoo! News Search Results for law bankruptcy | 28 Jul 2010 | 5:29 am

Chief Restructuring Officer In Texas Rangers’ Bankruptcy Threatened

Chief Restructuring Officer In Texas Rangers’ Bankruptcy Threatened As if the Texas Rangers’ Chapter 11 bankruptcy case couldn’t get stranger, the chief restructuring officer appointed in the Texas Rangers’ Chapter 11 bankruptcy case received threatening phone calls that were so serious that security has been increased significantly. But U.S Bankruptcy Judge Michael Lynn tried to downplay the threats.

“I am not particularly worried about them,” the judge said. “After all, we do get those e-mails from disgruntled fans who believe — as, I understand, do some sports writers — that I should construe the Bankruptcy Code as wished for by the fans.

“I don’t expect anyone to shoot at him or me,” he said. “A baseball through my window is another matter.”

The exact content of the threats has not been disclosed to the public, however, they were serious enough to prompt the placement of Federal Protective Service vehicles at the front entrance of the courthouse during a Texas Rangers bankruptcy hearing. And while the Texas Rangers’ debtors have not directly encouraged fans to express hostility towards the bankruptcy trustee and his appointed chief restructuring officer, they have suggested that if they bankruptcy court does not decide in their favor that they are somehow damaging the baseball franchise and by extension the thousands of fans who support them. It is important that the bankruptcy process is not influenced by outside forces and that both debtors and creditors behave in a civil manner so that the integrity of the bankruptcy court is protected. Once we begin to attempt to influence the trajectory of a bankruptcy case with violence or even threats of violence then we are putting all bankruptcy debtors at risk. Just imagine what would happen if large banks could use their power and influence to sway bankruptcy judges and trustees presiding over personal bankruptcy cases. It would be a nightmare for small individual debtors who depend on the neutrality of the bankruptcy court to win their fresh start. It is important that despite their grievances with the bankruptcy process, that Texas Rangers fans refrain from threats and violence so that we can maintain the civility and neutrality of the bankruptcy process for the benefit of all of us.

Source: Reed's Bankruptcy Blog | 27 Jul 2010 | 6:22 pm

No Opportunity To Redeem Property After Foreclosure – That’s Why You Must Act Now

No Opportunity To Redeem Property After Foreclosure In the state of Texas, there is no opportunity to for a homeowner to redeem their property after a foreclosure sale. That’s why it’s important that homeowners facing foreclosure act quickly to stop foreclosure before their home is on the auction block.

Before a property can go to foreclosure, the lender sends a notice to the borrower telling them that they have about 20 days to pay up the delinquent portion of their loan. It’s at this point that borrowers should seriously consider bankruptcy if they know they want to keep their home but they cannot afford to pay the delinquent balance immediately. Failure to pay the delinquent balance of the home loan at this point will most likely lead to an acceleration of the loan. This means that the bank will make the entire balance of the loan due immediately and sue the debtor for the entire balance. If the debtor receives a letter saying that their loan has been accelerated and that the lender is scheduling a foreclosure sale, it is in their best interest to consider filing a bankruptcy because only bankruptcy or payment in full can stop the foreclosure process at this point. If the debtor does not file bankruptcy or pay the balance of the loan after receiving notice that the lender is scheduling a foreclosure sale, the property will proceed to the auction block and be sold out from under them. Once that property is sold, the borrower will have no claim to it and unlike some other states there is no grace period after the foreclosure sale for the borrower to redeem their property by paying in full even if they could do so.

Source: Reed's Bankruptcy Blog | 27 Jul 2010 | 5:21 pm

Celebrity Bankruptcy: Danny Masterson “That 70’s Show” Star Files Bankruptcy

Danny Masterson “That 70’s Show” Star Files Bankruptcy Danny Masterson who starred in “That 70’s Show,” filed Chapter 11 bankruptcy for his financially troubled limited liability company after the company was sued by TomatoBank for the balance their loan. Masterson’s company took out a loan out for $3.2 million in 2007 and after several extensions on payment, the lender, TomatoBank, eventually sued for $2,807,531 as well as for interest in the amount of $58,314 and delinquent property taxes totaling $45,723. But Masterson’s bankruptcy attorney has insisted that the company is only looking to reorganize the company in bankruptcy and that the lender does not have a legitimate dispute.

“We’re in bankruptcy to reorganize and ultimately finish the project and sell it and pay creditors where creditors are due,” Masterson’s bankruptcy said.

The “That 70’s Show” star insists that he will be able to finish the project and sell the condos even in this economy where property values are still depressed. However, if the company is able to continue their claim against the actor’s company, they will need to present a better argument to the bankruptcy trustee. Masterson will need to show that his company can survive and exit Chapter 11 bankruptcy with the ability to repay his creditors. In order to do that they may need to come to some settlement with the lender or find new financing to pay off the older creditors and finish the project. If they are not able to any of those things, the worst case scenario could be a liquidation of the property to pay creditors or repossession of the property by the bank with court approval of course.

Source: Reed's Bankruptcy Blog | 27 Jul 2010 | 2:17 pm

Converting Chapter 7 Bankruptcy Into Chapter 13 Bankruptcy

Converting Chapter 7 Bankruptcy Into Chapter 13 Bankruptcy If you’re in a Chapter 7 bankruptcy and behind on your car payments and home mortgage you could face a vehicle repossession and foreclosure. For those Chapter 7 bankruptcy debtors facing vehicle repossession and/or foreclosure converting their Chapter 7 bankruptcy into a Chapter 13 bankruptcy may be the right choice. Here’s what you need to know:

It is a lot easier to convert a Chapter 7 bankruptcy into a Chapter 13 bankruptcy than the other way around. However, you will still need to convince the bankruptcy trustee that the conversion is not being done in bad faith. You may not be granted a conversion if you converted in the past.
To receive approval for a conversion from Chapter 7 bankruptcy to Chapter 13 bankruptcy, you need to have a very good reason to convert. Most likely if you’re facing a vehicle repossession or foreclosure that may be reason enough.
You must be able to afford the Chapter 13 bankruptcy payments. If it is obvious that you cannot afford Chapter 13 bankruptcy, you won’t be granted the conversion.
Once your Chapter 7 to Chapter 13 bankruptcy conversion is approved you will need to have another meeting of the creditors and some of your debts may be treated differently. For example, if you have credit card debt, you may be required to repay some or all of those debts in your Chapter 13 bankruptcy.
And finally, once your bankruptcy conversion is approved you will be granted a brand new bankruptcy trustee who will then review and approve/disapprove your Chapter 13 bankruptcy repayment plan.

The good news is that once you convert to Chapter 13 bankruptcy your creditors will not be able to move forward on any collections actions because of the automatic stay.

Source: Reed's Bankruptcy Blog | 27 Jul 2010 | 11:45 am

Latvia's Personal Bankruptcy Law Won't Impact Nordic Lenders, Nordea Says

A Latvian personal bankruptcy law passed by parliament yesterday wont hurt Nordic lenders because provisions set aside for bad loans will cover the impact of the bill, according to Nordea Bank AB.

Source: Yahoo! News Search Results for law bankruptcy | 27 Jul 2010 | 6:28 am

When Stating The Value Of Assets In Bankruptcy Guess High Not Low

When Stating The Value Of Assets In Bankruptcy Guess High Not Low Under the BAPCPA (“Bankruptcy Abuse Prevention and Consumer Protection Act”) debtors are required to state the value of their assets at their replacement cost. When debtors file for bankruptcy, their bankruptcy attorney gives them a disclosure that says something along the lines of the following:

You must determine how much your personal property is worth as it is today. Do not value your property based upon what you can sell it for. Instead, value it at what you would have to pay to replace it. If your property is new or close to new, consider retail value adjusted to whatever extent appropriate for the amount the property has been used. If there is a market for your property as used, you may use that market to determine value. For example, you may consider using thrift store prices or prices at house or garage sales or at a secondary marketplace such as eBay to determine what it would cost you to replace your personal property.

Debtors filing bankruptcy should not simply guess what they could sell their assets for; they must guess or estimate what it would cost for them to replace the item. Many bankruptcy attorneys suggest that the debtor find out how much it would cost to buy the same item either new or at a retail establishment that sells used items. The figure they discover once they do their research is only a marker and should be inflated a bit to avoid having problems with their bankruptcy discharge in the future if the valuation if off a bit. While it is okay to value the property a little high, it can be a death kiss for your bankruptcy case if it is found that you valued property in the bankruptcy significantly less than what if would cost to replace it.

Source: Reed's Bankruptcy Blog | 26 Jul 2010 | 6:16 pm

The Dangers Of Co-Signing A Parent’s Loan

The Dangers Of Co-Signing A Parent’s Loan The current economy has many parents turning to their adult children for help getting access to credit. But what are some of the dangers of adult children co-signing a parent’s loan?

Your parents can’t really afford the loan. If your parents have been turned down for a loan or credit card recently it is probably because they don’t have enough income to pay for the loan and/or their credit rating is poor. Co-signing a parent’s loan when they are obviously not financially fit enough to get approval from a bona fide financial institution means that you are taking on a risk that could put you on the road to bankruptcy.
Co-signing a loan or credit card for your parents could increase your debt-to-income ratio and lower your own credit score. Depending on how high the loan is you could end up owing debt disproportionate to your income. Credit card companies and other lenders you may be interested in doing business with may frown upon a high debt-to-income ratio and charge you higher interest rates, fees or refuse to do any business with you.
Your parents my refuse to repay the loan or credit card because they feel that you “owe” them. One of the biggest dangers of co-signing a parent’s loan is that the parent may simply refuse to pay it back. And since most adult children are not willing to send collections agents after their parents or sue them in court, they really have no way to enforcing their parents obligation to repay the loan. Thus, if a parent refuses to repay a co-signed loan, the lender can go after the adult child putting the co-signer at risk for collections actions and eventually bankruptcy if they are unable to pay the bill or fall upon financial hard times themselves.

Source: Reed's Bankruptcy Blog | 26 Jul 2010 | 5:22 pm

More Reasons Why D.I.Y Bankruptcy Is Bad News

More Reasons Why D.I.Y Bankruptcy Is Bad News Do It Yourself bankruptcy mills are becoming increasingly popular amongst financially strapped and misinformed debtors who mistakenly believe that they can’t afford a bankruptcy attorney. But using a D.I.Y bankruptcy mill either online or offline could spell disaster for your bankruptcy case and by extension your personal finances. Below are few more reasons why D.I.Y. bankruptcy is bad news:

Many bankruptcy petition mills sell you bankruptcy forms with little to no instruction on how to fill them out. Because of this and the debtor’s general lack of knowledge about bankruptcy, there is a huge chance that the debtor will make mistakes in filling out their bankruptcy forms. Bankruptcy mistakes can be costly in time and money. Mistakes in filling out bankruptcy forms can also lead to future litigation and accusations of bankruptcy fraud.
Many debtors using bankruptcy petition mills totally misunderstand their rights to bankruptcy exemptions. Understanding the difference between Texas bankruptcy exemptions and Federal bankruptcy exemptions can mean the difference between saving an asset or losing it to a creditor. Also, without a bankruptcy attorney’s experience it can be nearly impossible to figure out which of your assets are exempt and how to properly claim those exemptions without meeting with challenges from the bankruptcy trustee and creditors.
Debtors who have assets such as vehicles and homes face even more challenges as they try to figure out how to save their home from foreclosure or their vehicle from repossession during bankruptcy. Many creditors see a pro se bankruptcy filing as an opportunity to flex their muscles in ways they wouldn’t dare do if the debtor was being represented by a bankruptcy attorney. Pro se bankruptcy debtors who use bankruptcy petition mills may be more likely to face challenges to the automatic stay from creditors who want to continue their collections actions despite the debtors being in bankruptcy. Without the experience of a bankruptcy attorney, it will be very difficult for a pro se debtor to fight creditor attacks on their right to bankruptcy’s automatic stay protections.

Source: Reed's Bankruptcy Blog | 26 Jul 2010 | 12:23 pm

How To Make Your Bankruptcy Trustee Happy

How To Make Your Bankruptcy Trustee Happy When it comes to bankruptcy, your bankruptcy trustee is more than an administrator of your case; he/she is the gatekeeper of your bankruptcy discharge and your road to a fresh financial start. If you want to get your bankruptcy discharge, you need to make sure that you remain on the good side of your bankruptcy trustee. But how exactly do you do that? Below are a few tips on making your bankruptcy trustee happy:

Cooperate with your bankruptcy trustee. Not only is it a good idea but it is required by the law. Failure to cooperate with your bankruptcy trustee could result in the dismissal of your bankruptcy case.
Keep a record of your most recent tax returns so that the bankruptcy trustee can inspect them. Don’t have your most recent tax returns available? Get a copy because most likely the bankruptcy trustee may want to inspect the tax returns so that he/she can see proof of your financial condition.
Keep record of your most recent pay stubs from your job. Even if you are not working, make sure you keep track of any income you are receiving such as unemployment, disability, alimony or even child support. Be ready to show the bankruptcy trustee proof of your income upon request. For those who are self-employed be able to provide a financial statement and/or bank statements for your business.
If you are recently divorced, be prepared to provide the bankruptcy trustee with records that show how the marital assets were divided or liquidated.
Have you sold property or transferred assets to another person or entity within a year before filing bankruptcy? If so, the bankruptcy trustee may want to see the records for the transaction. Be prepared to present the bankruptcy trustee with this information.

Source: Reed's Bankruptcy Blog | 26 Jul 2010 | 10:20 am

Bankruptcy court filings

These firms recently filed with the U.S. Bankruptcy Court's local clerk of court offices. Bankruptcy - United States - Law - Services - Lawyers and Law Firms

Source: Yahoo! News Search Results for law bankruptcy | 25 Jul 2010 | 11:00 pm

Appeals Court Rules Bankrupt Visteon Cannot Unilaterally Terminate Retiree Benefit

Visteon Cannot Unilaterally Terminate Retiree Benefit A three-judge panel of the 3rd U.S. Circuit Court of Appeals overturned two lower court decisions, and ruled that auto parts supplier Visteon Corp. cannot terminate its retirees’ health and life insurance benefits without following certain procedures under bankruptcy law.

The court ordered that the benefits, which were terminated May 1, be reinstated immediately, and that any further attempts to modify them be subject to negotiations with the Industrial Division of the Communications Workers of America, or IUE-CWA, the union representing the retirees, said Tom Kennedy, an attorney who argued the appeal on behalf of the retirees.

The appeals court agreed that Congress, through the bankruptcy code, intended to restrict a debtor’s ability to modify or terminate retiree benefits during a Chapter 11 case, regardless of whether it could unilaterally terminate those benefits outside of bankruptcy.

Visteon must negotiate fairly with retirees before it can eliminate their benefits and if no agreement is reached, the bankruptcy court must be the one to determine if the proposed changes are fair and equitable to both parties in the Chapter 11 bankruptcy case. Additionally, Visteon must prove that it cannot successfully emerge from Chapter 11 bankruptcy without terminating or reducing retiree benefits. The group of retirees challenging the termination of their benefits argue that Visteon is doing a lot better than they claim and that they can in fact afford to pay the retiree benefits. U.S. Bankruptcy Judge Christopher Sontchi stood by his earlier determination that the retirees did not have vested rights in the benefits and that Visteon could terminate them unilaterally. He also declined to delay the implementation of the termination of those benefits pending an appeal saying that it would only delay the inevitable.

Source: Reed's Bankruptcy Blog | 25 Jul 2010 | 7:36 pm

Bankruptcy Judge Upsets All Sides In Texas Rangers Bankruptcy

Bankruptcy Judge Upsets All Sides In Texas Rangers Bankruptcy Bankruptcy Judge Michael Lynn has delayed the reopening of the Texas Rangers’ auction until August 12^th, a ruling that has upset both debtors and lenders in the Chapter 11 bankruptcy case that has been mired in controversy since it was filed.

Tuesday’s courtroom tug-of-war featured the Greenberg-Ryan group’s argument that the new auction should occur well before Aug. 12, when its financing agreements purportedly expire. But major lenders wanted a date in September, asserting that an earlier date might not give potential rival bidders – Houston businessman Jim Crane and Dallas investor Jeff Beck – enough time to arrange funding.

“We’re going to get this process on the road,” Bankruptcy Judge Michael Lynn said. “I know this doesn’t make all of us happy. But if that’s so, I’ve done something right in this case.”

The bankruptcy judge said that once the bidding is completed and the winning bidder is approved, the Texas Rangers’ Chapter 11 bankruptcy plan could be approved that day allowing the baseball team to exit bankruptcy within hours of the bidding.

The Greenberg-Ryan group has already upped the ante by increasing the cash portion of their starting bid to $306.7 million from $304 million after shedding some contractual commitments, including a much-criticized aircraft lease. Meaning that if the Greenberg-Ryan group wins the bidding war, the Texas Rangers would emerge from bankruptcy fully repaying former player Alex Rodriguez and other unsecured creditors who are owed a total of about $204 million.

In order for rival bidders to have a chance at seizing control of the Texas Rangers in this bankruptcy case they will need to bid at least $15 million higher than the Greenberg-Ryan group and be approved by the MLB, which has the right to disapprove any winning bid, much to the chagrin of lenders.

Source: Reed's Bankruptcy Blog | 25 Jul 2010 | 1:20 pm

Intent Not Ability Pay Determining Factor In Bankruptcy Dischargeablity

Intent Not Ability Pay Determining Factor In Bankruptcy Dischargeablity In a Chapter 7 bankruptcy case involving a saw mill worker who was temporarily laid off from work when he incurred over $5,000 in credit card charges, the bankruptcy court determined that the debts incurred during his time of unemployment were in fact dischargeable in Chapter 7 bankruptcy.

The details of the bankruptcy case:

The debtor, a saw mill worker was temporarily laid off from work as he always was for the winter; but genuinely believed that he would be rehired in the spring. But in the winter of 2008, the debtor learned that he needed surgery but believed he would successfully recover from the surgery and return to work. When the debtor did not recover properly from the surgery and subsequently was not rehired, he applied for and began receiving social security disability benefits. During his time of unemployment, the debtor incurred $5,583.79 in credit card charges; but made minimum payments each month until he eventually filed Chapter 7 bankruptcy in April 2009. The creditor objected to the dischargeability of the $5,583.79 accusing the debtor of fraud or false pretenses, saying that the debtor incurred the debt knowing that he could not afford to pay it. But the bankruptcy court disagreed with the creditor noting that the debtor had every expectation of returning to work in the spring of 2009 because he was always rehired and that the fact that the debtor made all of his minimum payments proved that he had intentions of paying the debt. The bankruptcy court also said that because the creditor focused on the debtor’s ability to pay only and failed to address the debtor’s intent to pay that the creditor had no good legal reason for objecting to the dischargeability of the debt in the first place and ordered the creditor to pay the attorney fees of the debtor in the case.

Source: Reed's Bankruptcy Blog | 25 Jul 2010 | 8:44 am

Are You A 99er? Here’s Your Guide To Avoiding Financial Apocalypse

Are You A 99er? Here’s Your Guide To Avoiding Financial Apocalypse As the unemployment crisis continues many people are finding that they are running out of options. After 99 weeks of unemployment insurance benefits, jobless individuals who have been unable to secure employment are faced with the prospect of foreclosure, creditor lawsuits and even destitution. But how do 99ers avoid a financial apocalypse? Let’s take a look at some things that 99ers should do immediately:

Don’t panic. Panicking can make you do things that can do more damage than good. Take a day or two off and give yourself time to fully assess your situation. What are you expenses? Do you have any other sources of income? What are the essentials? What can be cut out completely? What bills can go unpaid without jeopardizing your basic standard of living (i.e. keeping a roof over your head, a car, utilities, food etc.)
If you have debts with the IRS and student loan lenders, educate yourself about their deferment and hardship programs. You do not want to allow these bills to just fall by the wayside without trying to work something out with these creditors. Both the IRS and student loan lenders have incredibly powerful collections abilities and can make your struggle with unemployment just that much more difficult.
If you have a large amount of unsecured debt, consider bankruptcy. Chapter 7 bankruptcy can help you discharge credit card debts, medical bills and other unsecured debt. It can also help you stop a foreclosure, wage garnishments and lawsuits. For many unemployed individuals filing bankruptcy is exactly the type of financial lifeline they need.

Source: Reed's Bankruptcy Blog | 24 Jul 2010 | 5:15 pm

Media Company Wins Right To Proceed With Bankruptcy Reorganization

Media Company Wins Right To Proceed With Bankruptcy Reorganization Bankruptcy Judge Stephen Raslvich denied a request by union leaders to delay the bankruptcy reorganization of The Inquirer and the Philadelphia Daily News pending an appeal brought by the company’s pension plans to the U.S. District Court. Unions representing the pension plans have argued that they are owed $174 million in unfunded liabilities which is more than the company’s sale price. They have also warned that they are at risk of becoming insolvent in the future if the new owners of the media company are allowed to avoid any responsibility for the pension funds. However the bankruptcy court was not swayed by the union leaders’ arguments.

Raslavich said the pension plans, led by the Teamsters Union fund and including other employee funds, had failed to make a strong case that they would suffer irreparable harm if the reorganization were completed. He said the company faced a more immediate threat of insolvency if the 17-month-old bankruptcy case were not concluded by September.

The bankruptcy judge confirmed the bankruptcy reorganization plan of the media company. The plan provides that Philadelphia Newspapers L.L.C., which owns The Inquirer, the Daily News, and Philly.com, will be sold for $139 million to 16 financial institutions that were among its senior lenders. Furthermore, the bankruptcy judge argued that if the reorganization plan was not approved, the company would have been almost guaranteed to become insolvent.

But in better news for the company’s current employees, the Newspaper Guild, which represents journalists, advertising, and circulation staff, have reached a tentative deal with the bankrupt company that will include a 2 percent across-the-board pay cut and 10 unpaid furlough days per year over a period of three years. The union said that the bankruptcy deal would help the company avoid permanent cuts and save about $6 million in 2011 expenses.

Source: Reed's Bankruptcy Blog | 24 Jul 2010 | 3:10 pm

Applejack Art Partners’ Rapid Expansion Drives It Into Chapter 11 Bankruptcy

Applejack Art Partners Inc., which manufactures fine art prints and sells sports memorabilia, filed Chapter 11 bankruptcy after efforts to rapidly expand their company met with a faltering economy. The company which sells everything from Andy Warhol prints to chunks of turf from the Dallas Cowboys’ end zone is hoping to sell its assets in Chapter 11 bankruptcy which it says is the only way they can survive.

“The company made some expansion decisions in the past few years which turned out to be improvident in light of the circumstances surrounding the purchases and the declining state of the economy,” he said. “Without the sale, the company believes it would not be able to continue.”

When the company acquired Bruce McGraw graphics in August 2009, gaining the exclusive rights to images from the Walt Disney Co., the Museum of Modern Art and Andy Warhol they could not imagine that a Chapter 11 bankruptcy filing was on the horizon. Before filing bankruptcy, the company had announced their plans to transform some of the Disney images into promotional pieces and display them in J.C. Penney department stores across the country. They also had pre-bankruptcy plans of customizing the famous Andy Warhol prints of Marilyn Monroe. But instead the company fell deep into debt forcing it to seek Chapter 11 bankruptcy protection or face total insolvency.

Applejack Art Partners filed Chapter 11 bankruptcy with debts ranging from $10 million to $50 million and assets of only $1 million to $10 million according to the bankruptcy petition. Also, the company is facing litigation that includes its appeal against a $1.5 million judgment and a $1.6 million judgment.

Source: Reed's Bankruptcy Blog | 24 Jul 2010 | 8:00 am

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