Some thoughts on the recent spate of retail bankruptcies, over at DealB%k.

Credit Slips
(posted 5 days 1 min ago)

Great Plains Royalty Corp. v. Earl Schwartz Co. (In re Great Plains Royalty Corp.), 520 B.R. 292 (Bankr. D. N.D. 2014) – Two companies that acquired assets in a bankruptcy auction moved to reopen the case to clarify ambiguities in the … Continue reading →

(posted 5 days 10 min ago)

The right destination
I get dozens of questions each day from potential clients, but the top question when it comes to bankruptcy is this:
Isn’t it a better idea to settle my debts instead of filing for bankruptcy?
Sadly, there’s no right or wrong answer to that question. For some people, filing for bankruptcy makes the most sense. For others, debt settlement is the weapon of choice.
Here are some of the considerations you should take into account when making the decision between filing for bankruptcy and engaging in debt settlement.
How many debts do you have? If you’ve got only 1 or 2 outstanding obligations then it makes sense to look into debt settlement before bankruptcy. With fewer open accounts, it’s easier to negotiate settlements. When you’ve got a large number of creditors, it’s tougher to get them all to fall into line.
What types of debts do you have? Some creditors will talk settlement, others won’t. Credit card companies, for example, may be willing to accept an amount lower than what’s due to pay the debt in full. Federal student loans, however, don’t settle that often.

(posted 5 days 3 hours ago)

Consumer Financial Protection Bureau “CFPB” is taking steps to help fix the mortgage market.   According to a recent CFPB study, “almost half of all borrowers seriously consider only a single lender or broker before deciding where to apply.” This article has some very valuable tools: Guide to loan options, comparison of interest rates, guide to closing documents and closing checklist.
CFPB Director Richard  Cordray indicated that the rate calculator will offer more realistic rates for consumers for at least three reasons.  First, the calculator draws from morgage lenders’ own internal rate sheets so consumers will have access to the same information that lenders have about the consumers.  Second, it allows consumers to input a larger number of variables, including their credit scores, than other calculators.  Finally, the CFPB’s information is offered free from any agenda other than protecting consumers when they make mortgage decisions.

(posted 5 days 12 hours ago)

A reader wants to know if he should do debt settlements or file bankruptcy.

Dear Leon,
Should I do debt settlements or file bankruptcy? I might even be able to borrow enough money from family to pay most of what I owe.I owe $40,000 in credit card debts, and I barely manage to pay the minimum due each month. But it’s killing me. I make $42,000 per year. I have no valuable assets. I am planning to get married soon. I don’t want my fiancee to get burned if I bring my debt burden into the marriage.My parents have offered to give me enough money to pay off half my debts. My fiancee’s parents have offered to loan me enough money to pay off the other half. They feel it is wrong to file bankruptcy.Please tell me what to do.
Sincerely,
Josh

 debt settlements or file bankruptcy?Dear Josh,

For the sake of this discussion, I am going to assume that you are eligible to file Chapter 7 bankruptcy should you should decide to do so.

Los Angeles Bankruptcy Blog
(posted 5 days 13 hours ago)

The Wet Seal Inc. has filed for Chapter 11 bankruptcy protection in an attempt to save its remaining retail stores, according to an announcement made Friday.
The statement came just over a week after the teen clothing retailer stated it would be closing 338 locations and laying off 3,700 employees, roughly two-thirds its total chain. The bankruptcy filing listed assets of $10 million to $50 million and liabilities between $100 million and $500 million.
Wet Seal had cautioned last month it was considering bankruptcy as an option if it was unable to settle its cash issues, after reporting yet another quarter of losses.
Similar mall-based retailers Delia’s Inc. and Deb Stores filed for Chapter 11 bankruptcy in December—further evidencing the impact cheap, fast-fashion stores like H&M and Forever 21 have in the current teen fashion marketplace.
Wet Seal started in 1962 as a bikini shack in Newport Beach, California. Canadian retailer Suzy Shier acquired the company in 1984. The company went public in 1990 and expanded over the decade with additions such as Arden B., Contempo Casuals and Zutopia. By 2001, all stores converted to the Wet Seal name.
The company restructured in 2013 after a long streak of issues. Retail-industry veteran John Goodman was brought in January 2013 to assist in refocusing the company after former CEO Susan McGalla was fired in July 2012.

Total Bankruptcy
(posted 5 days 14 hours ago)

For those of you who are not familiar with my scholarship, I am fairly conservative in my approach, and I strive to remain objective in my analysis and balanced in my proposals. I believe that most companies try to get it right, I respect markets, and I do not think that financial institutions and private funds are evil. In fact, some of my scholarship suggests that private funds may actually add value to matters (see example here). I mention these things only to help you understand the lens through which I analyze corporate governance and restructuring issues, including the chapter 11 reform topics that will be the focus of my posts over the next several days.

Credit Slips
(posted 5 days 16 hours ago)

When ever I speak with members of the public about what I do, people automatically start in with the typical myths about bankruptcy.  They talk about “those people” and “irresponsible behavior.”  However, what they need to realize is that most people who file bankruptcy are good, upstanding citizens who simply had a something go wrong in their life.
Doctor42% of all personal bankruptcies are the result of medical expenses.  Of these individuals, 78% had medical insurance.  These individuals were doing everything right.  Most were working, carrying insurance and only borrowing what they could afford to repay.  Then a major health concern drove them down a path to financial disaster.  In my experience, most of these people have never missed a payment and would never have imagined themselves having to seek a fresh start through bankruptcy.

(posted 5 days 17 hours ago)

Filing Bankruptcy with too much property? If you or someone you know is thinking of filing bankruptcy, the value of the property that one has must be ascertained. If you have very little property and if the market value is low, you will more likely than not be eligible for a chapter 7 fresh start+ Read More
The post Thinking Of Filing Bankruptcy? Check Your Property Values appeared first on David M. Siegel.

(posted 5 days 20 hours ago)

Do you have Federal Student Loans? You may qualify for a Forgiveness Program and not even be aware of your eligibility.
Here are some basic rules:
1. This only applies to Federal loans. If you have private loans, the creditor may have programs for forgiveness, but probably nothing like this.

2. What job qualifies for “Public Service”?
Public Service is much broader than you would think. It includes:

Scholnick Law
(posted 5 days 20 hours ago)