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  Two out of three confirmed Chapter 13 cases fail.  Those are cases that met all the tests and got the judge’s OK. And still they crater. That’s a heap of people, deeply in debt, who don’t make it out of debt by using Chapter 13. Arizona bankruptcy lawyer John Skiba has a theory about those failures:
  • Life
  • Lack of a lawyer
  • Luck of the trustee draw
I wouldn’t argue against any of John’s culprits:  none of the things he lists help a Chapter 13 debtor. But I have an alternate set of reasons that those trying to reorganize their debt through Chapter 13 don’t make it to the end. #1  Overly ambitious goals Trying to keep a doomed house has to be the foremost reason that Chapter 13 cases crater. The mortgage payments were too large to begin with, or circumstances conspired to put the debtor deep in default. The amount necessary to reinstate the mortgage, while continuing to make current payments, is simply too large to  pull off within the five year limit of Chapter 13. If it isn’t the house, it’s the expensive car  or the time share.  In short, it’s the idea that nothing else should have to change to get out of financial trouble through Chapter 13.
10 hours 54 min ago
With agencies created by the Dodd-Frank Act embroiled in court battles and continued questions dealing with "too big to fail," can anyone honestly say the reform law is working?

Read More from: BankThink

10 hours 54 min ago
Wall Street Journal The backlash to online marketplace lenders is in full swing. Prosper Marketplace will fire 171 workers and its CEO won't take a salary, as loan volume declines and investors purchase fewer loans. The company will close a Utah office that's assigned to making loans for medical procedures, as it will make cuts totaling about 14% of its workforce, which is based in both San Francisco and Phoenix. Prosper's chief risk officer is being...

Read More from: BankThink

11 hours 22 min ago
[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NV087_0501ae_P_20160502183406.jpg" J="//si.wsj.net/public/resources/images/BN-NV087_0501ae_J_20160502183406.jpg" M="//si.wsj.net/public/resources/images/BN-NV087_0501ae_M_20160502183406.jpg" credit="Getty Images" placement="Inline" suppressEnlarge="false" ] A day after it said it was prepping for bankruptcy, teen retailer Aéropostale Inc. filed for chapter 11 protection to thin out, and it is taking on supplier Sycamore Partners in court. The Wall Street Journal has the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Appaloosa Management LP wants an independent probe of solar-energy firm SunEdison Inc., DBR reports in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

12 hours 41 min ago
In Re Engels, 536 B.R. 529 (Bankr. N.D. N.Y. 2015) – Postpetition a chapter 13 debtor signed an asset purchase agreement to sell certain real estate subject to court approval. However, the debtor never sought approval – not even after … Continue reading →
14 hours 24 min ago
By Donald L. Swanson  Let’s start by acknowledging that Argentina’s road from a $100 billion debt default in 2002 to a final mediated resolution in 2016 has been long and complex and difficult.  The road began during an economic crisis, reached partial resolutions in 2005 and 2010, and achieved a final mediated-resolution in 2016. During that time multiple lawsuits were filed against Argentia in the U.S. District Court for the Southern District of New York by its creditors, and Judge Thomas P. Griesa of that Court took an active role in addressing the default problems. On June 23, 2014, Judge Griesa appointed New York trial attorney, Daniel A. Pollack, as mediator in the Argentina cases.  And the subsequent mediation process ultimately achieved the final resolution in 2016. Prior to Mr. Pollack’s appointment, however, no mediator existed in the case.  The prior partial resolutions came about through a process described as a ’judge-mediated’ sovereign debt restructuring.”    The “judge-mediated” term refers to a judicial activism in which the judge deals with issues before the court “as part of an on-going restructuring process and not as isolated suits by a series of aggrieved creditors.”  The judge acts as both, (1) an arbiter of substantive and procedural issues, and (2) a mediator between opposing parties.

Read More from: Mediatbankry

14 hours 35 min ago
Action Item.  At every significant development in a bankruptcy case, beginning at its earliest stages, parties should consider whether a mediation process might be helpful immediately in resolving remaining disputes. #bankruptcy   #mediation   #bankruptcymediation

Read More from: Mediatbankry

16 hours 24 min ago
“We didn’t think anyone could be as great…” -Wayne “All the staff was friendly and helpful.  I never felt judged or ashamed for my situation.  Everything went smoothly and as expected.” “Every time I called with a question or concern, whoever answered the phone was always helpful and knowledgeable of who I was and what I needed to know.  Any messages I left were returned quickly.” -Mike “All friendly and helpful with any and all questions that I had during a stressful period in my life” -Kimberly “Very kind and understanding of our problem” -Brian and Teresa “Payment plan and the cost was good.  We will tell everyone we know about him” -Contessa “From my very first visit, Mr. Rogers made me feel better about myself and what I had to do.  All the staff and Mr. Rogers were the best.” -Annette “The staff was very friendly and easy to talk to.  John Rogers was also very friendly and easy to talk to.” -Julie “Thank You for all you have done.  I feel much better than I have since my husband’s passing.  The stress has lifted immensely. “ -Vivian
1 day 4 hours ago
Here at Shenwick & Associates, our goal for our consumer bankruptcy clients is to get as many of their debts as possible discharged, while enabling them to maximize the property they can keep in bankruptcy, which is exempted from the debtor’s bankruptcy estate that comes into being when a bankruptcy case is filed. Bankruptcy law is a federal system, but there’s a complex interplay between state and federal law in practice.  And this relationship between state and federal law also holds true for exemptions from bankruptcy. Section 522 of the Bankruptcy Code governs exemptions.  Section 522(b)(1) of the Code provides that “an individual debtor may exempt from property of the estate the property listed in either paragraph (2) or, in the alternative, paragraph (3) of this subsection.”  Section 522(b)(2) provides that “property listed in this paragraph is property that is specified under subsection (d) . . .” (which includes the federal exemption scheme, addressed below).  Section 522(b)(3) provides that “ . . .

Read More from: Shenwick & Associates

1 day 4 hours ago
Filing a Walworth County bankruptcy is a major decision that no one takes lightly. Although we all want to pay all of our bills in full, sometimes, life gets in the way. We may encounter an illness, a divorce, a medical emergency, or another predicament that results in uncontrollable debt. Bankruptcy laws were designed to help us in those types of situations, so we can get back to making ends meet. There are many positive aspects to filing for a Walworth County bankruptcy. We have outlined some of them below.   © Anatoly Tiplyashin | Dreamstime Stock Photos Major Benefits to Filing a Walworth County Bankruptcy 1. Filing a Walworth County bankruptcy can stop repossession of your vehicle and delay the foreclosure of your home. Let’s be frank. If you don’t have your vehicle to get to work, you’ll never pay off your debts. If you can’t get to work, you will lose your job and also be unable to look for a new job. Again, you’ll never be able to pay off your debts. It’s a catch-22 situation. If you are facing a home foreclosure, filing a Walworth County bankruptcy may stall proceedings. This could potentially give you time to catch up on your mortgage, sell your home, or refinance your home.

Read More from: Wynn at Law, LLC

1 day 5 hours ago
De-risking can be curbed with tools that help lower the cost of complying with anti-money-laundering rules but do not sacrifice the effectiveness of controls.

Read More from: BankThink

1 day 6 hours ago
The U.S. Supreme Court’s 2011 decision in Stern v. Marshall created a firestorm of uncertainty (and litigation) regarding the nature and extent of the bankruptcy courts’ authority.  Last year, the Court’s decision in Wellness International Network, Ltd. v. Sharif answered some of the many critical questions that arose in the wake of Stern and its progeny.  A recent article written by Ronit Berkovich and Doron P. Kenter for the LSTA Loan Market Chronicle examines some of the lessons to be learned, as well as some of the questions that remain unanswered after the Court’s seminal decision in Wellness.  The article is available in full here.
1 day 9 hours ago
Only a month ago we were singing the praises of the CVA and calling them the saviour of the high street following the creditors’ approval of the BHS CVA. (See our earlier blog Move over Mary Portas, CVA’s are the real saviour of the High Street). In the last week, administrators were appointed to both BHS and Austin Reed (Squires are acting for the administrators), which begs the question how effective are CVAs in the retail sector? CVAs first attracted the attention of the retail sector in 2006. The electrical retailer, Powerhouse, proposed a CVA to obtain a release of lease liabilities and parent company guarantees. Whilst the CVA did not succeed, this was on its drafting rather than on the principle that third party liabilities could be compromised. Although the next retail CVA which was proposed, Stylo Shoes, was rejected, the restructuring community then thought that they had discovered the winning formula with CVAs being approved for JJB Sports, Focus Do It All, Discover Leisure and Blacks. So where are all these companies now? Unfortunately as the table below highlights, obtaining creditor approval to a CVA does not necessarily lead to the continued success of the company, with only a third of the companies ultimately avoiding administration and continuing to trade. Company

Read More from: eSQUIRE Global Crossings

1 day 10 hours ago
You can look a long time in the Bankruptcy Code without finding Chapter 20. Chapter 7 is there;  so are Chapters 11 and 13.  But no 20. But you find it in bankruptcy courtrooms and in the arsenal of good bankruptcy lawyers. So, what’s up? Chapter 20 is really bankruptcy slang.  It’s a Chapter 7 case followed by a Chapter 13.  Together the two chapters make a “Chapter 20” case. Why would you need two bankruptcy cases?  Let’s explore. Chapter 20 beats the debt limits All of the powerful provisions and flexibility of Chapter 13 are only available to individuals whose debts are under the Chapter 13 debt caps. Go over the limit for either the unsecured or secured debt cap and you aren’t eligible. Enter Chapter 7.  There are no debt limits in Chapter 7.  You can owe as much or as little as may be and still be entitled to file Chapter 7. The Chapter 7 discharge can be expected to wipe out your personal liability for most unsecured debts and allowing you to fit into Chapter 13. The power of Chapter 13 The things Chapter 13 can do that Chapter 7 can’t so is long and enticing.
  • Getting time to get current on mortgages
1 day 10 hours ago
As banks nationwide trim their branch personnel, they must also make sure the remaining staff in their brick-and-mortar stores know what they are doing.

Read More from: BankThink

1 day 10 hours ago
A discharge is one of the most important functions of bankruptcy.  It is what releases a debtor from personal responsibility for his debts and helps provide a debtor with a “fresh start.”  The Bankruptcy Code allows a debtor’s discharge to be denied in certain circumstances, and the Supreme Court will soon decide an issue concerning one of these circumstances. On March 1, 2016, the Supreme Court heard oral arguments in the case of Husky International Electronics, Inc. v. Ritz, No. 15-145.  The issue in this case is whether false statements are required to trigger the Bankruptcy Code’s bar to discharge debts that are obtained by fraud.  Section 523(a)(2)(A) of the Bankruptcy Code prohibits a debtor from discharging “any debt . . . for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by . . . false pretenses, a false representation, or actual fraud.” Husky International Electronics, Inc. v. Ritz

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

1 day 11 hours ago
Wall Street Journal In another attempt to prevent taxpayer-funded bailouts of large banks, the Fed is scheduled to vote today on proposal related to derivative contracts. Hedge funds and asset managers like Pacific Investment Management Co. would lose their contractual right to terminate financial contracts with big banks. As it currently stands, asset managers can terminate contracts with a bank if the bank files for bankruptcy, and the asset manager doesn't have to get in line with...

Read More from: BankThink

1 day 11 hours ago
[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NO414_PE_Fai_P_20160414184729.jpg" J="//si.wsj.net/public/resources/images/BN-NO414_PE_Fai_J_20160414184729.jpg" M="//si.wsj.net/public/resources/images/BN-NO414_PE_Fai_M_20160414184729.jpg" credit="Mark Abramson for The Wall Street Journal" placement="Inline" suppressEnlarge="false" ] New York-based supermarket Fairway Group Holdings filed for bankruptcy and plans to keep operating normally, The Wall Street Journal reports. Biotechnology company Bind Therapeutics filed for bankruptcy after defaulting on its debt, Daily Bankruptcy Review reports in WSJ. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”)

Read More from: WSJ.com: Bankruptcy Beat

1 day 12 hours ago
A need for speed By Donald L. Swanson “You can’t fight every battle all the time,” and “You have to get as many settlements as you can—as fast as you can.”  These are truisms for debtor’s bankruptcy counsel. In a Chapter 11 case, the debtor’s best-interest is to identify resolvable disputes promptly, get each of them settled as quickly as possible, and move on toward a final resolution of all disputes in a confirmed plan. This best-interests lesson arrives in my early career: Debtor’s counsel in a Chapter 11 case resigns shortly after filing the case, and I step in.  A couple weeks later, a trial occurs on motions filed by many creditors to convert the case to Chapter 7.  The motions are based on all the usual grounds of continuing loss to the estate, gross mismanagement, etc. The trial lasts a full day, with my client’s CEO the prime witness.  A dozen attorneys do a tag-team job of pummeling my guy into the ground.  It’s brutal.  And the gallery is filled with a couple dozen creditors—all of whom, I quickly learn, hate my guy . . . or, at least, think he’s a rat and wish him ill. At the late-afternoon recess, my guy is feeling beat-up and bloodied.  He asks how I think it’s going.  “I’m not sure we can survive this,” is the most gracious-but-accurate response I can muster.

Read More from: Mediatbankry

1 day 14 hours ago
On May 1, 2016, BIND Therapeutics, Inc., and affiliated companies (“Debtors” or “BIND”) voluntarily filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. The filing comes days after the Cambridge, Mass., company received a notice of default from lender Hercules Technology III LP, which demanded immediate payment of the $14.5 million the lender says it is owed under the loan.  The Company is backed by Koch Industry Inc.’s David Koch. According to the First Day Declaration of Andrew Hirsch, President and Chief Executive Officer of the Debtors,BIND is a biotechnology company developing novel targeted therapeutics, primarily for the treatment of cancer.  Bind Therapeutics’ website says it is developing drug treatments that use nanoparticles to treat cancer. Per the declaration, the Debtors’ ultimate goal in bankruptcy is the maximization of estate value through a plan process, but also a marketing process in the event that other value-enhancing proposals that can be obtained.  In the near term, the Debtors’ immediate objective is to maintain a business-as-usual atmosphere during the early stages of the bankruptcy, with as little interruption or disruption to the Debtors’ operations as possible. The Debtors in these Chapter 11 cases are represented by Richards Layton & Finger, and Latham & Watkins LLP.  The bankruptcy cases are pending before the Honorable Brendan L. Shannon.
1 day 22 hours ago

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