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living in debt

What are the consequences of filing bankruptcy?

Is it better to live with the debt and keep making minimum payments?

That question sums up most people’s fears about shedding their debt through bankruptcy.

What will life be like, after bankruptcy?

Good questions.  And I applaud people who realize that debt and debt relief each have future consequences.  I’ve talked about it before.

Clients fear the ” bankruptcy unknown”, closing their eyes to the precariousness of their current situation as though doing nothing is a worthy choice.

But lets turn the question around:  what will life be like if you continue on like you’re doing?

Life in debt

Servicing debt from the past cuts down your future options.  Your paycheck is already committed before it hits the bank.

Whether it’s payday loans or credit cards for this month’s necessities, you’re locked in.

4 hours 17 min ago

Lawyer Nick GajewskiIf you are just starting to consider filing a bankruptcy case, you’re probably wondering where to start.  You’re asking yourself “What information and documents will I need to provide to my lawyer or to the court?”  This blog post will lay out the basics you need to get started.

Driver’s License and Social Security Card

First, you’ll need your Driver’s License and Social Security Card.  The Court will require you to present a government issued photo ID.  If your License has been suspended or you don’t have one, then you’ll need to get a Non-Driver ID card.  Your local State Trooper’s License Office can issue one and they’ll tell you what you need to get one.  Also, if you’ve lost your Social Security Card, then you’ll need to go apply for a new one.  You can apply at the Social Security office and it usually takes a few weeks to get your new card.

Read More from: Bonds & Botes, P.C.

6 hours 40 min ago

Leases: How About Those Attorneys’ Fees? In re FKA FC, LLC, 545 B.R. 567 (Bankr. W.D. Mich. 2016) – A chapter 11 debtor sought to assume and assign a lease. The debtor contended that the cost to cure defaults under … Continue reading

8 hours 7 min ago

Arch of Constitutional Court building in St. PetersburgTheoretically, a Russian debtor is able to reorganize. In practice, the law currently does not encourage voluntary restructuring of debt in a way designed to preserve the continued operation of business and jobs.  The interests of debtors and creditors are not appropriately balanced at present to achieve the best results.  Creditors currently have a strong incentive to aggressively pursue legal action against distressed businesses, to secure their vote at creditors’ meetings and the right to propose their own candidate to serve as an interim trustee.

An article outlining the main insolvency law in Russia, the Federal Law No. 127-FZ of October 26, 2002 “On Insolvency” (the “Law”) which deals with pre-insolvency re-organization and formal insolvency procedures including re-organization, has recently been published in Eurofenix, the official quarterly journal of INSOL Europe and examined this question. Click below to read the article.

Is it possible to Restructuring in Russia

Read More from: eSQUIRE Global Crossings

9 hours 19 min ago

Many Americans suffering from serious debt problems are finding that they don’t have the financial resources needed to shop for retail products. Moreover, the debt issues faced by millions of people in the U.S. are having a significant negative effect on US corporations, particularly businesses in the retail industry. Put simply: without money, American consumers are not making the kinds of purchases needed to boost up the struggling economy.

19 hours 54 min ago

The Bankruptcy Code’s priority scheme provides that the shareholders generally cannot receive anything on account of their investment until all secured, priority and unsecured creditors are paid in full.  This principle applies even when the company—and by extension, its shareholders—is a victim of fraud.  When such an unfortunate situation arises, as it has in the case of Syntax-Brillian, one cannot help but sympathize with the affected shareholders who have seen their investment wiped out with slim hope for any recovery.  It is often in these despairing contexts that we see parties seek atypical forms of relief in an effort to recapture the value of their investment.  That was the case in Syntax-Brillian, where the court considered whether it was appropriate to disqualify and terminate the Debtors’ liquidating trustee. 

1 day 56 min ago

The Supreme Court again will be addressing the powers of bankruptcy courts. At the end of the term, the Court granted certiorari in Czyzewski v. Jevic Holding Corp. to decide whether a bankruptcy court may authorize the distribution of settlement proceeds in a way that violates the statutory priority scheme in the Bankruptcy Code.  No. 15-649, 2016 WL 3496769 (S. Ct. June 28, 2016).  The Supreme Court is expected to address this fundamental bankruptcy issue sometime early next year.

Background

Jevic Transportation was a New Jersey-based trucking company. In 2006, Sun Capital Partners, a private equity firm, acquired the company in a leveraged buyout.  Sun Capital financed the transaction by borrowing against Jevic’s assets.  Shortly thereafter, Jevic refinanced the debt it had incurred pursuant to the buyout with a consortium of lenders led by CIT Group.  By late 2007, Jevic had defaulted on this loan. Jevic then filed for chapter 11 bankruptcy protection on May 20, 2008.

1 day 1 hour ago

A common argument made against regulating small dollar credit products like payday loans is that regulation does nothing to address demand for credit, so consumers will simply substitute their consumption from payday loans to other products:  overdraft, title loans, refund anticipation loans, pawn shops, etc.  The substitution hypothesis is taken as a matter of faith, but there's surprisingly little evidence one way or the other about it (the Slips' own Angie Littwin has an nice contribution to the literature).  

Read More from: Credit Slips

1 day 3 hours ago

california bankruptcy law

California Bankruptcy law is a lot like a unicorn….appealing but imaginary.

Instead, we have bankruptcy in California, where the landscape is shaped by community property;  state exemptions, large mortgages, and the 9th circuit court of appeals.

Like the Merced River cutting through the granite of Yosemite, those factors alter the bankruptcy landscape here.

Community property

California community property law defines what assets of a married couple come within the control of the bankruptcy court. While there are other community property states, it is the law of each state that defines how community property is created.  State law also defines the rights of creditors in that community property.

1 day 4 hours ago

Kathryn DavisThe Grand Prix of Boston has filed for Chapter 7 bankruptcy.  The Grand Prix was scheduled to debut as an IndyCar Series race on September 4, 2016 and was to run each year through 2020.  The race would run along the South Boston Seaport, and the city of Boston and the Massachusetts Convention Center Authority, among others, had reached an agreement with IndyCar to put on the race.  However, in April 2016 the organizers of the race announced that it would not go forward as planned.  They cited potential costs to correct flood zone issues as a reason for cancelling the race, but other sources cite low ticket sales and unhappy local residents as reasons for the cancellation.

Read More from: Bonds & Botes, P.C.

1 day 6 hours ago

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By: Donald L. Swanson

Conventional thinking (as I understand it) is that mediators should not have a role in preparing a settlement-terms document that concludes a successful mediation.

I’m suggesting that a mediator can/should have a limited-and-neutral role in preparing such a document.  Here’s why.

Some Ancient History

Its 25 years ago — or more.

I’m in a mediation session with a senior partner and a client. This is the first mediation session I’ve ever experienced — and I’m trying to figure out how it’s done.

The mediation lasts all day. And the case settles. By the end, everyone is tired and cranky.

Around 5:30 p.m., all attorneys are in the mediator’s office to prepare the settlement document. The mediator pulls out a single sheet of paper.  It’s a pre-printed form. It has: (1) a state court name at the top, with a blank for filling-in the specific court involved, (2) lines  for filling-in the case caption and case number, and (3) lines at the bottom of the page — presumably, for the parties’ signatures.  Otherwise, the page is blank.

Read More from: Mediatbankry

1 day 8 hours ago

Coin stacks with letter dice - FeesA new fee structure in respect of insolvency fees payable to the Insolvency Service came into force on 21 July 2016, pursuant to The Insolvency Proceedings (Fees) Order 2016 (SI 2016/692) (the “Order”), which revokes The Insolvency Proceedings (Fees) Order 2004 (SI 2004/593) and all ten subsequent amendment orders.

The Order increases the deposits and case administration fee payable in creditor’s petition bankruptcy proceedings (deposit increasing from £825 to £990 and case administration fee increasing from £1,990 to £2,775) and compulsory liquidations (deposit increasing from £1,350 to £1,600 and case administration fee moving from £2520 to £5000) in England and Wales. The case administration fee for debtor’s bankruptcy applications does not increase.

The Order also introduces a new general fixed fee, payable to the Official Receiver (“OR”) on the making of the insolvency order. This replaces the Secretary of State fee, which was dependent on the value of asset realisations and increased in bands with the amount paid into the Insolvency Service Account, being capped at £80,000. This new general fixed fee is £6,000 and is payable at the beginning of the insolvency, not at the end, ensuring the OR gets paid first.

Read More from: eSQUIRE Global Crossings

1 day 10 hours ago

 

when to file bankruptcyShould I wait until all of my savings are gone to file bankruptcy?, the caller asked.

And he didn’t mean, until my net worth is greatly reduced; he meant, until my bank balance is zero.

One has to admire the resolve of those who propose to pay on debts that they can never repay up to the point where they literally have nothing.

My advice, of course, is “no”.

There is no point in making further payments when you can see you’re heading for bankruptcy.

Bankruptcy exemptions allow you to keep a collection of assets necessary for a fresh start.  In California, we have exemptions that will even shelter meaningful cash in the bank.

In Chapter 13, you can keep everything you own.

There is not even a requirement  that you be destitute or even insolvent to file bankruptcy.  You simply need to be willing to play by the rules of the bankruptcy chapter you choose.

2 days 3 hours ago

We have written on other occasions on Civic Partners Sioux City, LLC.  When we last wrote in 2015, the debtor had lost the last of many interlocutory appeals following the Bankruptcy Court for the Northern District of Iowa’s denial of confirmation of the debtor’s plan of reorganization – a plan founded on a prior, contested ruling of the bankruptcy court that an amended lease of the debtor’s property to Main Street Theaters, Inc.

2 days 4 hours ago

economy-stock-marketThe bankruptcy courts have a long history of being willing to use their judicial power under the Bankruptcy Code to prevent perceived efforts by debtors to inappropriately shield their assets from creditors. This is true even when the debtors employ structures and devices that are complex and crafted in seeming compliance with applicable law. A recent example of this judicial scrutiny is reflected in Bankruptcy Judge Barbara Houser’s June 29, 2016 decision regarding the claimed exemption of offshore annuities by Samuel Evans Wyly.

Wyly commenced his bankruptcy case after a $123 million judgment was rendered against him in a securities fraud action brought by the SEC. The alleged securities fraud involved transactions undertaken by a variety of offshore trusts and offshore corporations controlled by Mr. Wyly and his brother (since deceased).

Read More from: eSQUIRE Global Crossings

2 days 5 hours ago

Attorney Ron SykstusI have written extensively regarding binding mandatory arbitration.  It is a contractual mechanism used to limit judge and jury trial rights which are fundamental in our country.

Read More from: Bonds & Botes, P.C.

2 days 6 hours ago

Attorney Joshua LawhornIn May, the Consumer Financial Protection Bureau filed suit against Mississippi based All American Check Cashing for engaging in deceptive practices. While the suit is still ongoing, progress has been made.

All American Check Cashing Closing Stores

Last week, the company stated in a press release that they would be closing all four stores in Alabama and five out of six stores in Louisiana. All Mississippi stores will remain open. All American will also forgive the loans from those closed stores. The estimated amount forgiven, according to the lender, is $800.000.

Read More from: Bonds & Botes, P.C.

2 days 6 hours ago

In re Intervention Energy Holdings, LLC, No. 16-11247 (KJC), 2016 WL 3185576 (Bankr. D. Del. June 3, 2016)

In this Opinion, Judge Kevin J. Carey denies a secured creditor and common member’s motion to dismiss the Chapter 11 cases of two Delaware limited liability companies for lack of corporate authority, siding with other federal courts that have “consistently refused to enforce waivers of federal bankruptcy rights.”  Op.at *10.  In doing so, the Court declines “the parties’ invitation to decide what may well be a question of first impression of state law (i.e., determining the scope of LLC members’ freedom to contract under applicable state law provisions) when an alternate ground for decision is present.”  Id. at *6. Read More ›

Tags: Dismissal

Read More from: Delaware Bankruptcy Insider

3 days 3 hours ago

Doug Jacobs’ post answering the question “do I have to file on all of my debts”, pushes my semantics button.

Doug was, in all innocence, paraphrasing clients, who imagine that bankruptcy represents a choice by the debtor of which debts he wants to discharge.

Wrong!

The popular usage of “filing bankruptcy on” certain debts suggests that debtors get to pick and choose which debts are listed in their cases. Not!

People file bankruptcy; people don’t file “on debts“. A person who is a debtor in a bankruptcy proceeding is expected to list all of their debts, under penalty of perjury.

At the beginning of the case, the debtor does not get to pick and choose which creditors are included in the filing.

Afterwards, the debtor can elect to reaffirm debts that they want to repay and are willing to be legally liable for. Better, from my perspective, a debtor can voluntarily repay debts they feel morally obligated to repay, without a reaffirmation.

Words are important to lawyers; words shape and reflect how we think about the world.

Make my nerdy day by getting this terminology right.

3 days 5 hours ago

FIFTH THIRD BANK TO PAY $18 million to African-American and Hispanic auto borrowers for lending discrimination and $3 million to credit card customers for deceptive marketing practices.

Ripped off by Fifth Third Bank?Consumer Financial Protection Bureau “CFPB” and Department of Justice (DOJ) entered into an agreement with Fifth Third Bank requiring that the bank change its pricing and compensation structure in order to reduce the risks of discrimination, and to pay $18 million to harmed African-American and Hispanic borrowers. The CFPB’s action against Fifth Third’s deceptive marketing of credit card add-on products requires the bank to provide an estimated $3 million in relief to eligible harmed consumers and pay a $500,000 penalty.

It appears that Fifth Third may have let their employees or contract auto dealers run amuck because CFPB Director Richard Cordray said “Fifth Third’s move to a new pricing and compensation system represents a significant step toward protecting consumers from discrimination.”

3 days 18 hours ago

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