Tribune has been going through bankruptcy since the company filed for Chapter 11 protection in 2008. This is not the first time the company has been allowed to pay bonuses to its employees, and there were no objections to the program from Tribune's creditors.
]]> The bonuses are just part of the company's efforts to emerge from Chapter 11 bankruptcy protection on better financial footing. As mentioned in previous posts, Chapter 11 is intended for companies that seek to remain in business while addressing debt concerns, as well as submitting a realigned business model in order to emerge as a more streamlined, efficient organization.Tribune is attempting to reach the end of what has been a long process, lasting four years thus far. There will be a court hearing in June to rule on the company's latest efforts to reorganize and incentivize.
Bankruptcy protection can be a solid option for companies that have become mired in a complicated and burdensome debt situation. Often the restructuring of a business model can be the answer for a company that has become too entangled with debt obligations to conduct business effectively.
Source: San Francisco Chronicle, "Bankruptcy judge authorizes Tribune bonuses," Randall Chase, May 4, 2012
]]>All types of people find themselves in position to file for Chapter 7, from celebrities to regular middle-class citizens. A recent story about a federal judge in California should demonstrate to Escondido-area readers that sometimes it doesn't matter who you are or what you do for a living, Chapter 7 can be the best option in a bad situation.
]]> A judge with the California Central District Court recently filed for Chapter 7 bankruptcy. He has been a federal district court judge since 2007 and if he's like most of his colleagues, he earns $174,000 per year.A judge filing for bankruptcy is notable due to its rarity, but as mentioned above, financial hardships can happen to anyone. In the Chapter 7 filing, the judge and his wife listed assets of $833,426 and liabilities of $895,292. Among the liabilities is approximately $70,000 in credit card debt.
The bankruptcy trustee handling the case has indicated that the plan is to put the couple's Los Angeles area home on the market for an asking price of $1.2 million.
Taking the step to file for Chapter 7 bankruptcy was probably a very heartbreaking experience for this federal judge. His attorney indicated that the judge did everything he could to pay his debts before filing, including withdrawing his retirement funds.
Filing for Chapter 7 bankruptcy may be nerve-racking, but an experienced bankruptcy attorney can make the process less complicated. Anyone worried about any kind of associated embarrassment or shame should know that certain steps can be taken to make sure the Chapter 7 process is as painless as possible
Source: The Wall Street Journal, "Federal Judge, 'Like So Many Others,' Files for Bankruptcy," Joe Palazzolo, April 25, 2012
]]>The property broker who set out the vision for the large Tuscan-style villa on the biggest parcel of residential real estate on the Newport Coast filed for Chapter 7 bankruptcy in April of 2011. Once spectacularly wealthy, he was one of the many victims of the real estate bubble burst.
]]> The 12.5 acre property and the mega mansion sitting upon it are expected to fetch around $22 million at auction, a quarter of its original value. The agent responsible for the sale said over 700 people had attended an open house and dozens had registered as bidders for the auction.As mentioned in previous posts, Chapter 7 bankruptcy is meant to liquidate a filer's assets, except for possessions labeled as exempt under the bankruptcy code. The sale of the filer's assets by a bankruptcy trustee is intended to pay off the filer's creditors and put the filer on the path toward a financial re-start.
The mansion owner in this case listed assets of about $2.36 million when he filed for Chapter 7. The filing indicates that he owes approximately $50 million to some 200 creditors.
Filing for Chapter 7 bankruptcy can be confusing, and also difficult to accept. But those interested in learning more should remember that this type of bankruptcy is a tool for the consumer, and many times can be the best option in a bad financial situation.
Source: Reuters, "California mansion fire sale: the fall of a billion-dollar realtor," Tim Reid, April 17, 2012
]]>The company, which struggled to adapt to the digital camera revolution, filed for bankruptcy earlier this year and has remained in business while attempting to streamline its operations and reorganize its business structure.
]]> As part of the Chapter 11 bankruptcy process, Kodak was to submit a reorganization plan within 120 days of filing, but the company has asked the bankruptcy court to give them a six-month extension to file the plan.Once a reorganization plan is submitted, Kodak will then have 60 days to engage their creditors to accept the plan.
While filing for an extension is not always the optimal course for businesses going through Chapter 11, it is a common occurrence. Kodak has cited its enormous and complex business structure as the reason for the delay in redesigning operations.
As discussed in previous posts, the business bankruptcy process is intended for companies that wish to remain in business while reconfiguring their operations to ensure a more efficient business model, and while also paying off their creditors over time. The intended goal is to emerge as a stronger business with a greater chance of becoming consistently profitable.
No company ever wants to file for bankruptcy and live through the associated negative press. Yet, filing for Chapter 11 has often been a solid long-term solution for companies in the San Diego that sought to remain in business by weathering a financial storm. Eastman Kodak Co. may prove to be just such a company that uses bankruptcy as an ultimately advantageous tool.
Source: USA Today, "Kodak says it needs more time to organize," Matthew Daneman, April 15, 2012.
]]>According to court documents, Sapp owes approximately $6.7 million, which includes unpaid child support and alimony. The filing also shows that he no longer possesses his 2002 Super Bowl ring, which he earned as a member of the Buccaneers.
]]> A onetime contestant on TV's "Dancing with the Stars," Sapp continues to work for the NFL Network. His contract ends there in August, and it is unknown whether he will be retained. In any case, this recent decision to go forward with bankruptcy will give the former football star the elbow room he needs to get his finances in order.Readers in the Escondido area may know that Chapter 7 bankruptcy is generally for the liquidation of the filer's assets, except for those possessions which are exempt. Unlike Chapter 13 bankruptcy, there is no plan of repayment of the filer's creditors. The process under Chapter 7 involves a marshaling of the filer's assets by the bankruptcy trustee, who then sells those assets in order to pay off the creditors in accordance with federal law.
The Chapter 7 bankruptcy process is probably the most misunderstood, as many people believe that such a filing involves repossession of property and the embarrassment repossession evokes. However, the process is often quiet and does not deprive a person of all possessions. In this way, Warren Sapp's very public and substantial filing is unrepresentative of most experiences with Chapter 7.
While bankruptcy court websites are usually available for public viewing, a sympathetic advocate will ensure that standards of strict confidentiality are upheld in order to limit public attention. Additionally, in most circumstances, many personal possessions are exempt from the bankruptcy estate.
Once a Chapter 7 discharge is realized, the individual's creditors are prevented from taking any collection efforts against the filer. And although it can be complicated, the process of Chapter 7 can be the best option for many people seeking a fresh financial start.
Source: USA Today, "Warren Sapp files for bankruptcy in Florida," April 7, 2012
]]>The filing comes in the wake of another solar power controversy involving the California company Solyndra, which filed a Chapter 11 bankruptcy petition in 2011. Solyndra received a $500,000 million federal loan before the filing. The company's failure has been used repeatedly to criticize efforts to keep America away from an oil-based transportation economy.
]]> Solar Trust of America listed assets between $1 million and $10 million, as well as liabilities between $50 million and $100 million.In previous posts, we've discussed Chapter 11 bankruptcy as a tool for individuals and companies to reorganize their business models, stabilize their financial situations and gradually pay creditors back over time. Business bankruptcy can be a lengthy process, but often a beneficial one.
While bankruptcy is frequently associated with failure in the media, what is rarely mentioned is that the ultimate goal of a Chapter 11 bankruptcy is for the business to emerge stronger. California residents will probably want to stay up to date on Solar Trust's bankruptcy proceedings, as good news involving bankruptcy is rarely the topic of news coverage, even if a company does emerge successfully.
Source: Dayton Daily News, "Solar Trust seeks bankruptcy protection in Del.," Randall Chase, April 2, 2012
]]>Bankruptcy, debt consolidation and debt settlement are solid ways of achieving a much needed restart. But while legitimate means of dealing with heavy debt are available, California residents should also be aware that some unscrupulous people have begun to prey on individuals who are earnestly looking for a path to financial stability.
]]> One man in California, along with five companies he controlled, has become the subject of a Federal Trade Commission complaint targeting mortgage relief scams. The FTC says that hundreds of people may have been victimized by an effort to swindle homeowners looking for a financial fresh start. Specifically, the scammers used websites and phone calls to promise hundreds of consumers that their debts would be forgiven, yet all the while the scammers had no intention of delivering on their promises, leaving the paying victims out in the cold.The scams in question involved individuals or companies who pretended to be mortgage relief specialists but weren't. This can be an effective ruse since many people who are struggling with financial burdens, including mortgages, may be considering all the alternatives to relieve debt and stop foreclosure proceedings.
The FTC is aiming to crack down on those who take advantage of people in these situations. Seeking help to address financial troubles should not lead to circumstances in which further financial damage is inevitable. Each financial situation is unique, but there are many legitimate tools, including bankruptcy, to help people who are being crushed by debt to get some breathing room while money matters are organized.
Source: National Mortgage Professional Magazine, "FTC Helps Freeze Assets of California-Based Mortgage Relief Scammer," March 22, 2012.
]]>San Diego area football fans may be more familiar with Michael Vick's legal and financial troubles than non-football fans. Essentially, Vick was arrested a few years ago for running a dog fighting ring and ultimately sentenced to time in federal prison. As a result of his legal trouble, he filed for bankruptcy as the unexpected turn of events in his life left him behind on many of his financial obligations. A lot of people thought his days of playing football and living the good life were over when he traded in his cleats for a prisoner number. But that hasn't been the case.
]]> When Vick's career collapsed, he handled his associated financial troubles by filing for Chapter 11 bankruptcy. Under Chapter 11, individuals and businesses submit reorganization plans in order to stabilize their financial situations and pay their creditors back gradually. When Vick filed, he owed nearly $20 million to 45 different creditors.Vick set out to prove his doubters wrong, earning a second chance at an NFL career and leading the Philadelphia Eagles to the playoffs. His revitalized playing career led to a large contract, and much of the money he has earned so far has been applied to his creditors.
Now that he has revived both his football career and his earning potential, he owes less than $400,000. While Vick may appear fortunate due to his high salary as an NFL star, it is important to note that he carried a rather sizeable debt that may be in tune with what many typical Americans face.
Chapter 11 bankruptcy is one of many tools that can be used to right a wayward financial situation. The process can last for a few years or more, but the filer has a chance to come out in a much better financial position. As Vick's case shows, bankruptcy has the potential to offer debtors a new beginning.
Source: Forbes, "Disgraced NFL star Michael Vick nearly free of $20 million bankruptcy," Brian Solomon, March 14, 2012
]]>However, new allegations have recently surfaced that JP Morgan Chase may have also engaged in this practice in their credit card collection efforts, and that could land the national bank in hot water.
]]> The real problem is that a bank will claim an individual owes more credit card debt than the outstanding balance. When this happens, the consumer's credit rating can be seriously threatened. The effects can be felt long after an outstanding debt has been paid.Chase has many branches in the San Diego area, and California residents may have extensive dealings with the bank, including credit card accounts.
Casting an even darker cloud over this issue are the allegations that the Chase collections department may even be actively destroying incoming records that favor the debtor, such as records of past payments made. The allegation harkens back to the worst of the foreclosure crisis and may concern anyone in southern California who is looking for a fresh start from credit card debt.
The pressure of such debt can certainly be crushing, leading to creditor harassment and even bankruptcy. The recent allegations against JP Morgan Chase could seriously affect San Diego citizens, and residents who believe they may have been victimized by fraudulent bank practices would be wise to consider all of the available legal options.
Source: Time, "Robosigning Redux? Regulator Probes Chase Over Credit Card Collections," Martha C. White, March 15, 2012
]]>However, what many of those cardholders don't know, until they receive a Form 1099-C from their lenders in the mail, is that credit card debt is considered taxable income if it cannot be shown that the debt was discharged through bankruptcy. In that case, a former debtor could be held responsible for the taxes attached to the credit card debt.
]]> 1099-Cs are tax forms issued by the lender to the cardholder and the IRS, detailing the cancellation of the debt at issue. In some cases, a cardholder may have discharged the debt years earlier in bankruptcy proceedings. But the former debtor will still receive the 1099-C after the financial institution stops trying to collect and writes off the debt for its own tax deduction purposes.The only way to avoid paying taxes on the forgiven debt at that point is to produce the documentation from the bankruptcy proceedings. If those records are no longer in a person's files, that could mean trouble. Credit card debt that is canceled or forgiven is taxable income unless it can be shown that the debt was discharged through bankruptcy proceedings.
When the current economic crisis hit America, many households found it increasingly necessary to get their fiscal houses in order. For many people, bankruptcy has been a tool that offers protection for individuals to regain their financial footing and aim for a more secure future.
Source: USA Today, "Cancelled credit card debts come back to haunt taxpayers," Sandra Block, Mar. 5, 2012
]]>California residents may be interested to hear that a small regional hospital in Michigan recently filed for Chapter 11 bankruptcy after the hospital lost $7 million during 2011. Thankfully, hospital staff will continue operations while the financial restructuring occurs.
]]> The hospital's directors, who are on the look-out for potential investors, made the decision to file for Chapter 11 bankruptcy because it was believed that bankruptcy was the only way to save the hospital. According to the chairman, the hospital struggled for years and made a lot of sacrifices, including dramatic cuts to the workforce, but the facility was simply not able to save enough money.Since filing for bankruptcy, Cheboygan Memorial already received an offer for a loan from another health-care corporation. The loan will be used to let the hospital continue to provide services to patients during the Chapter 11 reorganization. As a result of their decision, hospital officials remain hopeful about the future.
For struggling businesses in California, Chapter 11 can offer much needed relief while a new financial plan is set into motion. The process of filing for bankruptcy can certainly feel overwhelming for some people, but once the procedure is finished, business owners can breathe more easily while a clearer plan for the future takes shape.
Source: Soo Evening News, "Hospital files for Chapter 11 bankruptcy," March 2, 2012
]]>The man is an entrepreneur who was involved in a number of projects and owned dozens of business over the years, including one that sought to create an engine that runs on water. However, he stressed in a recent news article that the bankruptcy filing was a personal bankruptcy and not a business bankruptcy.
]]> The entrepreneur said that he had no choice but to file for bankruptcy because of ongoing disputes with banks and investors. He simply needed the protection that filing for personal bankruptcy provides from creditors. The filing is a move that he hopes will allow him to continue moving forward with his business and with his life.As readers in the San Diego area know, bankruptcy can be hard on everyone involved, but sometimes it is the only way to make a fresh start. Harassment from creditors and overwhelming payments distract from an individual's ability to work and live, making it even harder to pay back the debt. Knowing that there is a way out from under all the debt is extremely important and often the first step towards finding relief from all the hardship associated with debt.
Source: U-T San Diego, "Entrepreneur files for bankruptcy," Jeff McDonald, Feb. 19, 2012
]]>The company that issued the results -- CreditKarma -- also noted that for the first time in nine months, scores have improved across the country. The average increase in consumer credit score nationwide rose from 660 to 661, making the increase in San Diego particularly positive.
]]> According to some analysts, one reason for the recent drop in consumer debt is the holiday season. Many consumers take on additional debt over the holidays to buy gifts for family and loved ones and then repay the debt shortly thereafter. It is also common for consumers to take a break from spending in the months following the holiday season.While a reduction in consumer debt and the overall increase in credit scores are certainly positive developments, the statistics do not suggest that Californians are out of the woods yet. San Diego, which has an exceptionally high cost of living, has a much higher debt load than the national average.
Sitting on a mountain of debt in California is not a fun experience, especially if residents also have debt management issues. With limited employment prospects and a staggering economy, sometimes the only way to get out from under crushing debt is through personal bankruptcy. Talking to a legal professional who is familiar with bankruptcy law can outline the options and tools for helping a person make a fresh financial start.
Source: utsandiego.com, "Credit scores improve," Dan Calbreath, Feb. 16, 2012
]]>The loan was obtained for a housing project that was never built. After defaulting on the loan, it was purchased, and the new creditor obtained a judgment against the man. The parties appeared to reach a settlement agreement, but then the creditor backed out. As a result, the developer filed for Chapter 7 bankruptcy protection while he attempts a fresh start.
]]> For more people, the debt carried may not rival that of the developer, but debt can nonetheless be weighty. If a person owes any significant amount to creditors, Chapter 7 bankruptcy might be a solution. Chapter 7 is probably the most common form of personal bankruptcy available. It allows debtors to stop creditors from harassment while much of the existing debt is discharged.However, it is important to note that some exceptions exist. Not all debt can be discharged in bankruptcy. For example, student loans, child support and alimony will usually survive bankruptcy intact, and the debtor will be required to continue payment. Other types of debt cannot be discharged under Chapter 7, but can be discharged under Chapter 13.
Thus, it is important for residents in the San Diego area to weigh the pros and cons of each type of bankruptcy. For debtors looking for a fresh start, such an important decision can be made easier with the help of an experienced bankruptcy attorney.
Source: sacbee.com, "Sacramento developer Kolokotronis files for Chapter 7 bankruptcy," Bob Shallit, Feb. 4, 2012
]]>Though there are exceptions, in the majority of cases, the following kinds of debt are not allowed to be discharged through bankruptcy:
• Secured debt
• Student loans
• Alimony or child support
• Restitution
• Car accidents caused by the use of illegal substances
• Car accidents caused by malicious intent
• Income tax debt
• Ex-spouse credit card debts or legal fees
]]> While the above kinds of debt are usually ineligible for discharge under a bankruptcy filing, there are some exceptions. For instance, secured debt can be eliminated if a debtor surrenders the item to which the secured interest is attached. That item could be a car, jewelry or some other kind of merchandise.As for student loan debt, the debt can sometimes be discharged if the borrower can show that he or she has suffered a total disability that permanently prevents employment. However, proving permanent disability can be difficult, given the current standards for eliminating student loans.
Additionally, individuals may discharge some income tax liability if very specific criteria are met. Generally, an experienced legal professional is needed to help file for bankruptcy that discharges income tax liability.
While some debts may not be eliminated through personal bankruptcy, there are still ways of eliminating many other kinds of debt. For example, Chapter 7 bankruptcy provides debt relief to many San Diego and Escondido residents who are experiencing hard times. Chapter 7 can help end creditor harassment and eliminate unsecured debt. There are some exceptions to Chapter 7 filings and eligibility, so it likely best to seek advice from a legal professional who can accurately assess your specific bankruptcy needs.
Source: Fox Business, "Debts That Can't Be Wiped Out in Bankruptcy," Justin Harelik, Jan. 31, 2012
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