Posts Tagged 'Bankruptcy'

Mar 01, 2012 Posted by Grace Macarthur No Comments » Tags: Bankruptcy Chain Quiznos Sandwich Chain Sandwich Chain Quiznos

Sandwich Chain Quiznos Avoids Bankruptcy

News outlets have reported in recent weeks how the recession hit Denver-based sandwich chain Quiznos. In fact, until recently, many sources assumed Quiznos would opt for bankruptcy protection to alleviate its debt burdens brought on by a lowered demand for sandwiches and a price war with its main competitor, Subway.

But this week, the sub shop decided to avoid bankruptcy court by ceding control of its operations to Avenue Capital, one of its major creditors. According to sources, the deal will involve a takeover of corporate management by Avenue, while franchise operations should continue to operate normally.

At the corporate level, the Quiznos decision to avoid bankruptcy made sense: in exchange for eliminating some of the sandwich chain’s debt, Avenue got to take corporate control. If the new owner plays its cards right, it could make the changes necessary to turn Quiznos around and return it to profitability.

Individuals may face similar choices. Here’s how to navigate the world of debt-relief options.

  • Creditor negotiation: Essentially the Quiznos route, this method of easing debt may benefit both parties. Deb

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Feb 23, 2012 Posted by Brianna Tewksbury No Comments » Tags: Bankruptcy

Leaving Creditors Off of Your Bankruptcy

No. Any creditor whom you owe a balance to must be listed on the petition. 

No. Even with a $0.00 balance the credit card companies will likely close your accounts once you file bankruptcy. Some creditors WILL let you keep your account but even if this is the case, you do not want to pay off any large balances right before filing for bankruptcy. If any creditor receives more than $600 in the 90 days prior to filing it is considered a preferential treatment, meaning that the trustee can request the money back from the creditor.

No. As stated above, if you owe money to someone they are a creditor. The trustee and the Bankruptcy Court do not allow preferential payments. They do not like to see you pay Dad back, but not Visa for example. For this reason, any payments made to family members or friends in the past year before filing must be listed on the petition.

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Jan 23, 2012 Posted by Grace Macarthur No Comments » Tags: Bankruptcy Bankruptcy Double

How the Bankruptcy Double Standard Hurts Consumers

A recent article from The New Yorker highlights a troubling disparity in the way we view bankruptcy and loan restructuring in general in this country. As was evidenced in the recent bankruptcy filing of American Airlines, bankruptcy for corporate entities is generally considered part of an overall savvy approach to managing debts and investments.

While American could have continued paying its debts (it filed bankruptcy with more than $4 billion in the bank), it opted to take the bankruptcy route, which will allow it to restructure its debts into ones that make more financial sense. After the company filed its Chapter 11 bankruptcy petition, most analysts praised its decision, citing the success other airlines have had with reorganization bankruptcies in recent years.

For consumers interested in filing personal bankruptcy, though, the attitude of the general public is vastly different.

Bankruptcy as a Moral Issue

The current turmoil in the housing market highlights exactly how differently the general public views personal bankruptcy:

  • The housing bubble falsely inflated housing prices.

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Jan 13, 2012 Posted by Brianna Tewksbury No Comments » Tags: Bankruptcy Choices Lead Financial Choices Financial Choices Lead

Can Your Financial Choices Lead to Divorce and Bankruptcy in Arizona


Joint Accounts for Married Couples:  Can Your Financial Choices Lead to Divorce and Bankruptcy?

Several surveys report that the majority of married couples put all of their money in joint accounts.  However, that number is less than it used to be, and there are several other options available to married couples.

Some couples choose to keep a joint account for joint expenses, and two separate accounts for spending or saving money.   Others choose to completely separate their accounts, so that every payment needs to be coordinated and divided among spouses.  Which selection is the best, and is there one more likely to cause financial disaster than the others?

Sharing expenses seems natural for married couples, and often the choice newlyweds make will depend on the specifics of their relationship, expenses, and earnings.  If you have no direct reason to choose a certain way to divide or combine assets, it is best to choose what makes you most comfortable, and does not hurt your relationship.

When One Spouse Has Considerable Debt

If one spouse has quite a bit of debt, and the other does not, it will probably be best to consider that debt as mutual debt, for the sake of your relationship.  Studies have shown that couples that fight over debt tend to end up divorced, and can also fall into bankruptcy.

This does not mean it is wise to consolidate or legally take on the previous debt of your spouse, however.  Doing so may have financial implications in a divorce.  And many attorneys recommend a prenuptial agreement among spouses with variegated finances.

Take Spending Habits Into Account

In addition to debt, spending habits can cause tension, which can lead to divorce and bankruptcy down the road.  It is important to come to an agreement about your debt and your budget early in marriage, and preferably before the marriage.  That way, you will have made a mutual decision early on and prevent fighting and debt down the road.

Speak with a local bankruptcy attorney to discuss if bankruptcy is the best option for you.

Stephen M. Trezza

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Oct 20, 2011 Posted by Grace Macarthur No Comments » Tags: Bankruptcy Chapter Bankruptcy

What happens if a debtor fails the Chapter 7 Bankruptcy means test?

If you are considering declaring bankruptcy or have reached the point where you are going to declare bankruptcy, you may be wondering what type of bankruptcy is appropriate for you.  There are two main types of bankruptcies for individuals: Chapter 7 and Chapter 13.  The type of bankruptcy you can declare is based on a calculation called the means test.

Chapter 7 is a bankruptcy where your unsecured debts are liquidated or eliminated.  This means that you do not have to pay the debt ever.  Unsecured debts commonly include credit card charges, membership dues, and utility bills.  Chapter 13 bankruptcy is a reorganization of your debts.  This bankruptcy means your debts are reorganized so you have three to five years to pay them.

For the average person considering bankruptcy who has little property and a significant portion of their debt is unsecured debt, Chapter 7 is the preferable bankruptcy option.  This is because it means they do not have to pay the unsecured debt ever, whereas Chapter 13 will require them to pay the debt, only it is paid over a period of time.

For many years, because of the advantage a Chapter 7 bankruptcy provides in eliminating debt over Chapter 13 bankruptcy, individuals with high incomes who technically had the means to pay their debt through a Chapter 13 bankruptcy were still choosing Chapter 7 bankruptcy.  Therefore, in 2005, Chapter 7 bankruptcy was changed to include a “means test.”  The means test was created specifically to prevent individuals with high income from choosing Chapter 7 bankruptcy.

1. Are you earn

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Oct 16, 2011 Posted by Brianna Tewksbury No Comments » Tags: Bankruptcy Pennsylvania Chapter

Controversy erupts over Harrisburg, Pennsylvania Chapter 9 Bankruptcy Filing

Although the politics has been going on for a while, and rescue bills were considered, Harrisburg, Pennsylvania went ahead and filed Chapter 9 Bankruptcy.  The State of Pennsylvania has not only objected to the eligibility of the City of Harrisburg, the legislature is working on a bill that would strip the city of its ability to be a debtor in bankruptcy at all.

Documents can be read here:

Docket Report for City of Harrisburg, Pennsylvania Chapter 9 Bankruptcy

 Chapter 9 Bankruptcy Petition for Harrisburg, Pennsylvania

Objection by State of Pennsylvania to Harrisburg bankruptcy filing 

Oct 13, 2011 Posted by Grace Macarthur No Comments » Tags: American Airlines Bankruptcy

American Airlines & The Long-Term Financial Benefits of Bankruptcy

The current financial situation of American Airlines serves as a lesson on how filing for bankruptcy can lead to long-term financial strength – and, perhaps more importantly for the airline, how avoiding bankruptcy can sometimes cause long-term financial struggles.

Of course, every individual situation is unique and the American Airlines model can’t be applied across the board. But for people teetering at the edge of their finances wondering whether personal bankruptcy could have any benefits down the road, the story of American Airlines is worth considering.

In the months and years immediately after the terrorist attacks of September 11, 2001, Americans flew less and many airlines struggled to remain profitable. In the ensuing years, many of them (including Delta, Northwest, US Airways and others) filed for Chapter 11 bankruptcy protection, which allowed them to reorganize their finances and debts.

American Airlines did not choose bankruptcy; instead, the airline opted to negotiate benefits and salaries with its employees and managed to continue operating. At

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