There are many questions raised when a company files for corporate bankruptcy. As an investor, people would like to what happens to the company, who would look into the interests of investors, and above all, if the old securities have any value left, or is the stock is turned into paste paper until the company is reorganized.
Companies that go out of business or try to recover from crippling debt are governed by federal bankruptcy laws. A bankrupt company, the "debtor," can use either Chapter 11 or chapter 7 of the Bankruptcy Code.
Under Chapter 11, the company is allowed to "reorganize" its business and attempt to develop into a profitable corporation. The company still functions on a day-to-day basis other than the fact that all important business decisions have to be agreed upon by a bankruptcy court.
Where as under Chapter 7, the company will stops all it operations and completely shut all its functions. The court assigns a trustee to "liquidate" (sell) the company's assets. The money so collect is then used to pay off the debt, which would take account both the debts to creditors and investors.
During a payment, the investors are paid first, due to their risk involvement. Bondholders have an advantage over stockholders since bonds stand for the debt of the company and the company has agreed to pay bondholders interest and to return their principal. Where as stockholders own the company, and therefore take on greater risk. On a good day, it is the stockholder who would make more money, but at the same time, as the company goes bankrupt, the stockholders bear to lose, as owners are last in line to be repaid if the company fails. Also remember that under Chapter 11, stockholders are still able to trade the stock, but under Chapter 7 the stock is worthless.
The other creditors are usually secured creditors that have low risk factors since the credit that they extend is usually backed by collateral. Collateral can be the mortgage or other assets of the company. They also stand to be paid first as the company files for corporate bankruptcy.
Filing Bankruptcy provides detailed information about filing bankruptcy, filing bankruptcy online, filing chapter 11 bankruptcy, and more. Filing Bankruptcy is affiliated with Free FICO Score.
Article Source: http://EzineArticles.com/?expert=Josh_Riverside
Thursday, November 15, 2007
Florida Bankruptcy - Walk Away From Debt
Florida bankruptcy laws try to provide relief to borrowers with a new lease of life provided they try to learn from their past mistakes and in future manage their finances effectively and more efficiently. In fact, it is a legal way to get rid of debts.
It is always better to seek counseling from lawyers when you in case unfortunately fall into a financial trap and are unable to repay your loan liabilities. Under the there are many ways you can avail to get protection and relief. In certain case if you don't have regular income due to unemployment or serious sickness or in some other similar situation, Florida bankruptcy laws do have provision to deal with such genuine cases with protection and can allow a person to be absolved from paying part or full debt liability. In Florida, most of the people file bankruptcy under chapter 7 and of bankruptcy code. However, majority file under chapter 7.But on has to furnish documentary proof that he has no assets to repay.
Moreover, filing under chapter 7 cannot seek relief in future under chapter 7 again for next six years. In fact filing bankruptcy under any chapter is not a panacea from falling into debts in future unless you reform and learn from your past follies and manage your finances viz-a-viz your income more efficiently and carefully.
Otherwise, there is always a chance you may fall into a more serious debt trap with no point of return. So be careful and cautious while filing bankruptcy and after it is a comfortable situation, you loose credibility with debtors and your credit rating as well. So always, take wise decision after fully realizing what is good for you. If you have any other option to fulfill your debt commitment that should be pursued first and this option should be availed last of all when there is no other way out. Always keep in mind while filing bankruptcy that you have through very complex court procedures full of hassles seriously damaging your social standing and reputation as an honorable citizen.
California bankruptcy, Michigan bankruptcy laws are somewhat similar to Florida bankruptcy laws with minor variations in exemptions limit depending upon the average income of people, their spending habits, economic level, percentage of cases filed under different chapters of bankruptcy code by people residing in these cities, otherwise by and large the laws are same as governed by federal court.
Debtips is a resourceful channel to make you finance literate and manage your personal finances. Bankruptcy is an unfortunate situation and can happen even to seasoned businessman or to a new entrepreneur. In US Bankruptcy is dealt under uniform federal laws and fall under chapter 7, 9, 11, 12, 13 of bankruptcy code. Florida Bankruptcy cases are generally dealt by courts under chapter 7 and 13.
Article Source: http://EzineArticles.com/?expert=James_Arther
It is always better to seek counseling from lawyers when you in case unfortunately fall into a financial trap and are unable to repay your loan liabilities. Under the there are many ways you can avail to get protection and relief. In certain case if you don't have regular income due to unemployment or serious sickness or in some other similar situation, Florida bankruptcy laws do have provision to deal with such genuine cases with protection and can allow a person to be absolved from paying part or full debt liability. In Florida, most of the people file bankruptcy under chapter 7 and of bankruptcy code. However, majority file under chapter 7.But on has to furnish documentary proof that he has no assets to repay.
Moreover, filing under chapter 7 cannot seek relief in future under chapter 7 again for next six years. In fact filing bankruptcy under any chapter is not a panacea from falling into debts in future unless you reform and learn from your past follies and manage your finances viz-a-viz your income more efficiently and carefully.
Otherwise, there is always a chance you may fall into a more serious debt trap with no point of return. So be careful and cautious while filing bankruptcy and after it is a comfortable situation, you loose credibility with debtors and your credit rating as well. So always, take wise decision after fully realizing what is good for you. If you have any other option to fulfill your debt commitment that should be pursued first and this option should be availed last of all when there is no other way out. Always keep in mind while filing bankruptcy that you have through very complex court procedures full of hassles seriously damaging your social standing and reputation as an honorable citizen.
California bankruptcy, Michigan bankruptcy laws are somewhat similar to Florida bankruptcy laws with minor variations in exemptions limit depending upon the average income of people, their spending habits, economic level, percentage of cases filed under different chapters of bankruptcy code by people residing in these cities, otherwise by and large the laws are same as governed by federal court.
Debtips is a resourceful channel to make you finance literate and manage your personal finances. Bankruptcy is an unfortunate situation and can happen even to seasoned businessman or to a new entrepreneur. In US Bankruptcy is dealt under uniform federal laws and fall under chapter 7, 9, 11, 12, 13 of bankruptcy code. Florida Bankruptcy cases are generally dealt by courts under chapter 7 and 13.
Article Source: http://EzineArticles.com/?expert=James_Arther
Personal Bankruptcy Laws
Individuals can file for personal bankruptcy as a last ditch effort when their credit reaches the limit. This helps them clear out a few debts by selling their assets and starting a whole new life without creditors beating at their door. The gives them an opportunity to start afresh without credit worries since creditors have no more right to press collection charges.
Presently, individuals can file for bankruptcy under Chapter 7 or Chapter 13. Chapter 7 involves liquidating all the assets to pay off the creditors. Chapter 13 involves registering a plan to pay of the creditors from the monthly wages of the debtor within a specified amount of time. However, new laws passed by the President in 2005 might make the options for filing the case under Chapter 7 a bit more narrow and might force most individuals to file a bankruptcy case under Chapter 13 instead.
Chapter 13 requires the individuals to provide proof of income, as the whole law is based on the individual’s steady income. If the debtor fails to pay the monthly credit amount, the case might be dismissed from the court and will require the individual to file for bankruptcy all over again.
When an individual files for bankruptcy, it does provide him with a fresh start, but the credit bureaus keep records of the bankruptcy details and this might affect the debtor's credit rating for the next 10 years. However, some banks currently offer a new kind of credit card that requires some initial security payment that will help build up the credit rating so that things are almost normal by two to three years.
The new law also requires the individual to take up credit counseling at least six months before filing for bankruptcy, which means the individual has to go through a licensed lawyer to file the case.
Bankruptcy provides detailed information about bankruptcy, bankruptcy attorneys, bankruptcy faqs, and more. Bankruptcy is affiliated with New Bankruptcy Laws.
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey
Presently, individuals can file for bankruptcy under Chapter 7 or Chapter 13. Chapter 7 involves liquidating all the assets to pay off the creditors. Chapter 13 involves registering a plan to pay of the creditors from the monthly wages of the debtor within a specified amount of time. However, new laws passed by the President in 2005 might make the options for filing the case under Chapter 7 a bit more narrow and might force most individuals to file a bankruptcy case under Chapter 13 instead.
Chapter 13 requires the individuals to provide proof of income, as the whole law is based on the individual’s steady income. If the debtor fails to pay the monthly credit amount, the case might be dismissed from the court and will require the individual to file for bankruptcy all over again.
When an individual files for bankruptcy, it does provide him with a fresh start, but the credit bureaus keep records of the bankruptcy details and this might affect the debtor's credit rating for the next 10 years. However, some banks currently offer a new kind of credit card that requires some initial security payment that will help build up the credit rating so that things are almost normal by two to three years.
The new law also requires the individual to take up credit counseling at least six months before filing for bankruptcy, which means the individual has to go through a licensed lawyer to file the case.
Bankruptcy provides detailed information about bankruptcy, bankruptcy attorneys, bankruptcy faqs, and more. Bankruptcy is affiliated with New Bankruptcy Laws.
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey
Valid Reasons To Consider Filing Bankruptcy
Nobody wants or plans to file bankruptcy, especially with the recent drastic changes in the bankruptcy law which makes it more difficult or even impossible for people in certain situations to even consider it. Bankruptcy is a personal thing and is also often a very emotional thing, so it is not something to enter into without a very thorough examination of your bankruptcy options and alternatives.
Consumers who find themselves in the undesirable situation of having a mountain of debt may be considering filing bankruptcy. This is not something that is a personal reflection on the person, since more often than not, this is not a sign of any type of financial mismanagement, but is more typically found to be something that was completely out of the control of the consumer, such as a job layoff when it was not expected, unexpected high medical or hospitalization bills that were not covered by one's health insurance, a hotly contested divorce situation, or many more reasons too numerous to list here.
Although many times consumers feel that bankruptcy is a sign of weakness or a sign of defeat, many times it is the most viable option available under the circumstances. Thousands of people file every year, even though the bankruptcy laws have changed in recent years, making it much more difficult to file than it used to be. Bankruptcy can also be personally embarrassing, although it should not be.
It is interesting to note that approximately 30% of consumers filing for bankruptcy are doing so because of a divorce situation. Especially for women, even though more women work outside the home these days than ever before, many women after a divorce find themselves with more bills to pay off than their income allows. In a divorce situation, the marital debt is equally divided between the spouses. Most of the time, that debt is on credit cards that carry a high interest rate, and missing only a few payments on that, combined with the late fees assessed, can create a mountain of overdue debt that seems insurmountable.
In the case of some type of major or catastrophic event such as a major surgery or hospitalization, especially when such medical costs are not covered or have exceeded the limits of one's health insurance, this can leave one with huge bills and no real hope of ever getting them paid off. For a major medical procedure, the costs can exceed $100,000 before you know it as well as much higher, and even at low or no interest assessed, this is something that will cause many people to consider bankruptcy to resolve.
Another common reason for filing bankruptcy is young people who get in over their financial heads with credit cards and student loans while they are in college. This is borne out by the fact that about 10% of people filing are under age 25. In this situation, it is important to note that while bankruptcy could provide relief for the credit card debt, federal student loans are exempt from being discharged by bankruptcy, so often this does not help these people.
You want to make sure you understand bankruptcy law as good and thoroughly as possible. The laws have changed drastically and filing is no longer a "do it yourself" project. The money you spend on a qualified lawyer can pay you back in spades by not making the bankruptcy more painful than it needs to be, as well as offering advice as to alternatives that you may not have considered that would be far less painful.
Article Source: http://EzineArticles.com/?expert=Jon_Arnold
Consumers who find themselves in the undesirable situation of having a mountain of debt may be considering filing bankruptcy. This is not something that is a personal reflection on the person, since more often than not, this is not a sign of any type of financial mismanagement, but is more typically found to be something that was completely out of the control of the consumer, such as a job layoff when it was not expected, unexpected high medical or hospitalization bills that were not covered by one's health insurance, a hotly contested divorce situation, or many more reasons too numerous to list here.
Although many times consumers feel that bankruptcy is a sign of weakness or a sign of defeat, many times it is the most viable option available under the circumstances. Thousands of people file every year, even though the bankruptcy laws have changed in recent years, making it much more difficult to file than it used to be. Bankruptcy can also be personally embarrassing, although it should not be.
It is interesting to note that approximately 30% of consumers filing for bankruptcy are doing so because of a divorce situation. Especially for women, even though more women work outside the home these days than ever before, many women after a divorce find themselves with more bills to pay off than their income allows. In a divorce situation, the marital debt is equally divided between the spouses. Most of the time, that debt is on credit cards that carry a high interest rate, and missing only a few payments on that, combined with the late fees assessed, can create a mountain of overdue debt that seems insurmountable.
In the case of some type of major or catastrophic event such as a major surgery or hospitalization, especially when such medical costs are not covered or have exceeded the limits of one's health insurance, this can leave one with huge bills and no real hope of ever getting them paid off. For a major medical procedure, the costs can exceed $100,000 before you know it as well as much higher, and even at low or no interest assessed, this is something that will cause many people to consider bankruptcy to resolve.
Another common reason for filing bankruptcy is young people who get in over their financial heads with credit cards and student loans while they are in college. This is borne out by the fact that about 10% of people filing are under age 25. In this situation, it is important to note that while bankruptcy could provide relief for the credit card debt, federal student loans are exempt from being discharged by bankruptcy, so often this does not help these people.
You want to make sure you understand bankruptcy law as good and thoroughly as possible. The laws have changed drastically and filing is no longer a "do it yourself" project. The money you spend on a qualified lawyer can pay you back in spades by not making the bankruptcy more painful than it needs to be, as well as offering advice as to alternatives that you may not have considered that would be far less painful.
Article Source: http://EzineArticles.com/?expert=Jon_Arnold
Stopping Foreclosure NOW - Chapter 13 Bankruptcy
Foreclosure proceedings can be stopped instantly by filing for Chapter 13 bankruptcy, the home saver, but there are the following dangers, including losing your home to con artists as well as to your creditors.
The nightmare of foreclosure is the dark side of the American Dream. The recent past provided people who had long been shut out of home ownership the opportunity to fulfill that dream. It was done through a combination of rising home prices, low mortgage rates and fancy financing know as subprime. Everyone wanted to be invited to the party and the subprime lenders made sure that as many as possible were included.
In my previous article, To Avoid Foreclosure, I discussed all of the standard ways recommended by HUD, mortgage lenders and financial advisors, on how to stop or avoid foreclosure. This article explores stopping foreclosure by filing for Chapter 13 bankruptcy.
Bankruptcy - BEWARE - Possible Hazards Ahead
This sure-fire method of stopping foreclosure dead in its tracks is being touted far and wide as the way people near or over the edge of foreclosure can stop foreclosure quickly. The stopping foreclosure part quickly is true. What is not being told to people in this desperate situation is that stopping foreclosure by declaring bankruptcy may save only a fraction of the equity in their homes or worse.
The worse is that scam artists are using the come on of stopping foreclosure by filing for bankruptcy to steal the equity.
Here is how they do it:
These scammers convince homeowners who are in trouble to file for Chapter 13 bankruptcy. They tell the homeowner that this filing is only for stopping the foreclosure proceeding. This is the nugget of truth in the mine that has been salted with false hope.
Then the scammers convince the homeowner to sign over the home to them and rent it back, "until they can get back on their feet."
This is the danger zone, because if the homeowner has not been able to make their payments to the mortgage lender, how are they going to be able to make the rent payments to the scammer?
"Magically" the house ends up being owned by the scammer and the homeowner, who thought he was in trouble before, now has been thrown into a deeper hole.
Stopping foreclosure by declaring bankruptcy can be legitimate. Chapter 13, really called the wage earner's plan is nicknamed "the home saver," because filing for it stops foreclosure proceedings and allows the homeowner to stay in her or his home.
Here is how Chapter 13 works to stop foreclosure:
A working person who has unsecured debts of less than $307,675 and secured debts less than $922,975, is eligible to file for relief.
The filing, in the Bankruptcy Court where the filer resides, has to include information about income and expenditures as well as assets and debts. This information has to be detailed and supported with tax returns. The filer also has to file a certificate showing he or she has received credit counseling. There are fees totaling $274.00 for filing which can be paid in four installments.
As soon as the petition is filed, the foreclosure proceeding is automatically stayed. This is not stopping foreclosure forever. It only stays the foreclosure, allowing a "reasonable" time for the homeowner to bring his or her past-due payments current.
Then there are meetings in court and the filer has to provide a payment plan. This plan must provide for full repayment of the debts over a period of three or five years. (If the filer's income is below his/her state median, the period is three years. If it is above the state median income, then the five year period applies.)
Stopping foreclosure by filing for Chapter 13 bankruptcy can save your home if you are working and can make all of your payments according to the "plan." If you fall behind, however, the foreclosure will probably be restarted.
Article Source: http://EzineArticles.com/?expert=Steven_Shanin
The nightmare of foreclosure is the dark side of the American Dream. The recent past provided people who had long been shut out of home ownership the opportunity to fulfill that dream. It was done through a combination of rising home prices, low mortgage rates and fancy financing know as subprime. Everyone wanted to be invited to the party and the subprime lenders made sure that as many as possible were included.
In my previous article, To Avoid Foreclosure, I discussed all of the standard ways recommended by HUD, mortgage lenders and financial advisors, on how to stop or avoid foreclosure. This article explores stopping foreclosure by filing for Chapter 13 bankruptcy.
Bankruptcy - BEWARE - Possible Hazards Ahead
This sure-fire method of stopping foreclosure dead in its tracks is being touted far and wide as the way people near or over the edge of foreclosure can stop foreclosure quickly. The stopping foreclosure part quickly is true. What is not being told to people in this desperate situation is that stopping foreclosure by declaring bankruptcy may save only a fraction of the equity in their homes or worse.
The worse is that scam artists are using the come on of stopping foreclosure by filing for bankruptcy to steal the equity.
Here is how they do it:
These scammers convince homeowners who are in trouble to file for Chapter 13 bankruptcy. They tell the homeowner that this filing is only for stopping the foreclosure proceeding. This is the nugget of truth in the mine that has been salted with false hope.
Then the scammers convince the homeowner to sign over the home to them and rent it back, "until they can get back on their feet."
This is the danger zone, because if the homeowner has not been able to make their payments to the mortgage lender, how are they going to be able to make the rent payments to the scammer?
"Magically" the house ends up being owned by the scammer and the homeowner, who thought he was in trouble before, now has been thrown into a deeper hole.
Stopping foreclosure by declaring bankruptcy can be legitimate. Chapter 13, really called the wage earner's plan is nicknamed "the home saver," because filing for it stops foreclosure proceedings and allows the homeowner to stay in her or his home.
Here is how Chapter 13 works to stop foreclosure:
A working person who has unsecured debts of less than $307,675 and secured debts less than $922,975, is eligible to file for relief.
The filing, in the Bankruptcy Court where the filer resides, has to include information about income and expenditures as well as assets and debts. This information has to be detailed and supported with tax returns. The filer also has to file a certificate showing he or she has received credit counseling. There are fees totaling $274.00 for filing which can be paid in four installments.
As soon as the petition is filed, the foreclosure proceeding is automatically stayed. This is not stopping foreclosure forever. It only stays the foreclosure, allowing a "reasonable" time for the homeowner to bring his or her past-due payments current.
Then there are meetings in court and the filer has to provide a payment plan. This plan must provide for full repayment of the debts over a period of three or five years. (If the filer's income is below his/her state median, the period is three years. If it is above the state median income, then the five year period applies.)
Stopping foreclosure by filing for Chapter 13 bankruptcy can save your home if you are working and can make all of your payments according to the "plan." If you fall behind, however, the foreclosure will probably be restarted.
Article Source: http://EzineArticles.com/?expert=Steven_Shanin
Bankruptcy Credit Report - You Questions Answered
Bankruptcy Credit Report - You want to avoid bankruptcy at all costs - not only will you be left high and dry financially it will also take a devastating toll on your Credit Report, translating in a 7 to 10 year time period to get back on your feet. Exactly what damage will my Credit Report take and what are my options?
How long will it take to really get back to a secure financial position? Well that depends on quite a few factors so lets go through each one and try and match your situation. Firstly, when you file for bankruptcy (chapter 7 and NOT 13) all you debts get eradicated and you money owed to creditors get taken to zero. It's important to no that not ALL your debts will be completely erased - only those debts to Creditors. You will still have to pay money for things such as: student loans; criminal fines and penalties, forfeitures, taxes, debts arising out of willful misconduct and or malicious misconduct by the debtor, even spousal and child support, liability for injury or death from driving intoxicated, and non-dischargeable debts from a prior bankruptcy. You also need to note that when assets are being sold that there are certain assets that are non-exempt. This includes property such as: A second home - like a holiday home, Family heirlooms, a second car or truck, expensive musical instruments, collections such as stamps and coins, all investments such as cash, stocks, bonds, and bank accounts.
It's interesting to note that you might be able to get a loan shortly after you file for bankruptcy, because of the simple reason that now you've filed for bankruptcy then all your debts are returned to zero. So when you approach creditors they will have a look at your Bankruptcy Credit Report and note that now you have a very low debt. But it's not quite as simple as that you still need to show a solid and steady income stream and you need to have opened a few accounts, maybe some credit cards account and have built up a repayment history - showing that you can pay back creditors and debts. It's quite logical to see that if you start building up multiply bankruptcies then you will find it extremely difficult to get future loans - so don't get into a habit of filing for bankruptcy.
What are the alternatives to filing for bankruptcy? First make sure you visit experts that will look at ways to get out of having to file for bankruptcy - these include Consumer Credit Counselor (CCC), if you prove to your creditors that you are seeking help form these professional they will in most cases stop debt collection actions giving you a temporary reprieve form the pressure of having to make payments that you see no way of making. Look at your debt and work out what expenses you can live without - remember that your accommodation and transport are the most essential items so try and cut other expenses first.
To find out more about Credit Reports be sure to check out www.credit-reporter.net
How long will it take to really get back to a secure financial position? Well that depends on quite a few factors so lets go through each one and try and match your situation. Firstly, when you file for bankruptcy (chapter 7 and NOT 13) all you debts get eradicated and you money owed to creditors get taken to zero. It's important to no that not ALL your debts will be completely erased - only those debts to Creditors. You will still have to pay money for things such as: student loans; criminal fines and penalties, forfeitures, taxes, debts arising out of willful misconduct and or malicious misconduct by the debtor, even spousal and child support, liability for injury or death from driving intoxicated, and non-dischargeable debts from a prior bankruptcy. You also need to note that when assets are being sold that there are certain assets that are non-exempt. This includes property such as: A second home - like a holiday home, Family heirlooms, a second car or truck, expensive musical instruments, collections such as stamps and coins, all investments such as cash, stocks, bonds, and bank accounts.
It's interesting to note that you might be able to get a loan shortly after you file for bankruptcy, because of the simple reason that now you've filed for bankruptcy then all your debts are returned to zero. So when you approach creditors they will have a look at your Bankruptcy Credit Report and note that now you have a very low debt. But it's not quite as simple as that you still need to show a solid and steady income stream and you need to have opened a few accounts, maybe some credit cards account and have built up a repayment history - showing that you can pay back creditors and debts. It's quite logical to see that if you start building up multiply bankruptcies then you will find it extremely difficult to get future loans - so don't get into a habit of filing for bankruptcy.
What are the alternatives to filing for bankruptcy? First make sure you visit experts that will look at ways to get out of having to file for bankruptcy - these include Consumer Credit Counselor (CCC), if you prove to your creditors that you are seeking help form these professional they will in most cases stop debt collection actions giving you a temporary reprieve form the pressure of having to make payments that you see no way of making. Look at your debt and work out what expenses you can live without - remember that your accommodation and transport are the most essential items so try and cut other expenses first.
To find out more about Credit Reports be sure to check out www.credit-reporter.net
Article Source: http://EzineArticles.com/?expert=Justin_Fox
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