In 2009 we saw many corporate bankruptcies move swiftly, with the company filing bankruptcy and emerging form the bankruptcy process in only a few months.  But what exactly are the bankruptcy tools being used by companies such as CIT Group, Gm and others? Let’s take a look at two frequently used strategies in Chapter 11 bankruptcy :

Pre-Packaged Bankruptcy

A Pre-packaged …

You should avoid making pre-filing bankruptcy mistakes such as using home equity loans or retirement accounts to pay off debts.

Here are some common pre-filing mistakes that folks considering bankruptcy sometimes make:

1.  Refusing to consider bankruptcy until it’s too late. This is a pretty easy one to figure out, but it’s also a surprisingly common mistake made.  Too many …

According to an article in USA Today, the number of bankruptcy filings since January have reached 954,911, a significant increase from 703,732 in the same period in 2008.

The article said:

“In August, filings were up 22% compared with August 2008… The housing crisis has caused much of the recent financial distress.”

The rising number of foreclosures and the rising number of job …

According to an article in the Dallas-Morning News , pre-owned home sales have fallen 24 percent in May compared to the same period last year. Real estate agents have sole less than 6,000 single-family homes in May, which is the lowest sales total for May since 2000.

The article said:

Through the first five months of 2009, pre-owned, single-family home sales in North Texas have fallen by …

According to an article in the Dallas Morning News the sales and value of North Texas pre-owned homes continues to fall as much as 28 percent for single family homes and 31 percent for condos and townhouses. The massive amounts of foreclosures on the market is said to be contributing to the decline of sales and value of homes in North Texas.

The article said:

About 7 percent of homes …

The 8th Circuit Bankruptcy Appellate Panel ruled in favor of the debtor in Clark, Jr., Trustee, v. Wilmoth (In re Wilmoth). The debtor, after realizing that he could not possibly pay all of his debts and an $864,000 judgment against him consulted a bankruptcy attorney about what actions he should take which included a pre-bankruptcy sale of some assets.

Note to readers: The debtor did …

One of the most insidious myths about bankruptcy is that debtors who file bankruptcy will lose all of their personal property.  For the umpteenth time, this myth is simply not true.  A matter of fact, most debtors who file Chapter 7 bankruptcy do not lose any of their property.  Every state, plus the federal bankruptcy code provides a generous amount of exemptions for debtors to use …

The bankruptcy code allows the bankruptcy trustee to demand the return of  assets that were transferred before a debtor filed bankruptcy under certain circumstances. 

The debtor made payments on a debt that gave that creditor preferential treatment over other creditors. For example, if a debtor repaid a relative while not paying on their other debts, that money may need to be …

COBRA subsidies that paid 65 percent of unemployed workers’ health insurance premium have ended for 7 million unemployed Americans November 30 th .  The subsidy which is part of the American Recovery and Reinvestment Act lasts for 9 months from the date that an unemployed worker applies. But the first group of unemployed Americans receiving the subsidies has exhausted the time limit.  Some …

According to an article in the Salt Lake Tribune, since the recession began many consumers are choosing prepaid credit cards over traditional bank accounts and unsecured credit card accounts.

How It Works

The consumer buys a prepaid credit card from a retailer, loads it with money and sometimes even creates a direct deposit account with their employer. The cards are used to pay bills and …

Tags: Credit card Debit card Pre-Paid

According to an article in the Business Journal, True Temper Sports Inc. has filed for Chapter 11 bankruptcy protection.  The company is filing a pre-packaged bankruptcy petition with the approval of its secured lenders, bondholders and shareholders.

The article said:

“The filing is considered to be “a mechanism to implement the agreed upon balance sheet restructuring, and will …

The Consumer Law & Policy blog has a very revealing article about a judge in Indiana that took it upon herself to give indigent debtors a choice–”pay up” or “go to jail.”

The blog writer provided the transcript of an exchange between the debtor and the judge:

The Court: “So we’re here today for you to explain what you’re going to do to pay this off.”

Mr. Button: …