Thousands in Idaho Expected to File Bankruptcy

This year, more than 8,000 families in Idaho are expected to file for bankruptcy, a third coming from South East Idaho. This was the estimate of Bankruptcy Judge Jim Pappas of the District of Idaho.

According to Pappas, three main reasons precipitate the need to file for bankruptcy.

The first is medical costs that are too high to be paid by the bankruptcy filer. This primary reason accounts for half of all bankruptcy cases in Idaho. Most of the bankruptcy filers affected by exorbitant medical fees do have insurance, only not enough. So they have to resort to paying off their medical bills using their credit cards which puts them further in debt. Due to this, a reform of health care in the country is a necessity. But whether the recent health care reform initiated by the government is the correct answer remains to be seen.

The second most prevalent cause of bankruptcy is the loss or interruption of jobs and careers. Most people’s assets are so highly encumbered that even being out of work for two or three months might result in bankruptcy.

The third major contributing factor to the rising cases of bankruptcy is marriage and family problems. The most severely affected are single mothers who generally have more limited means of income compared to men.

There has been a disconcerting trend lately where bankruptcy filers are increasing among the very old and the very young. Generally those in their middle age are not affected as much. The elderly have had to file for bankruptcy largely because of high medical bills. On the other hand, the younger ones file for bankruptcy mostly due to overspending with their credit cards coupled with the skyrocketing cost of going to college.

Although there still exists a social stigma attached to bankruptcies, Judge Pappas sees it as a vital economic safety net that fosters risk taking and entrepreneurism that America is known for. He notes that even Abraham Lincoln had filed for bankruptcy in his lifetime, after he failed in becoming a storekeeper.

Part of the reason for the social stigma is that bankrupts are seen to be people who cop out of their responsibilities to pay their debts and use bankruptcy as a means to game the system. But in all his years of experience as a bankruptcy judge, Pappas estimates that only 1 to 3% of filers have questionable motives for filing bankruptcy. The vast majority of Americans and certainly those in Idaho who file for bankruptcy are genuine people. 93% of bankruptcy cases are filed by individuals not businesses.

Are you someone thinking of filing for bankruptcy? Call us for a free consultation at (813) 200 4133.

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    Auto Industries Big Players Find Life after Bankruptcy

    Two of the top three carmakers in the US auto industry, General Motors (GM) and Chrysler have begun to see better days after exiting Chapter 11 bankruptcy last year. GM has paid off the last of its $4.7 billion loans while Chrysler has posted a $143 million profit for its first quarter results. The third of the top three automakers, Ford did not file for bankruptcy protection and its shares closed at its highest since January 2005.

    It was a remarkable turnaround for both GM and Chrysler who filed for government- backed bankruptcy in 2009. For GM, it took them only 39 days from June 2 to July 10 to exit bankruptcy while it took Chrysler a tad longer between April 30 and June 10. When GM and Chrysler filed for bankruptcy last year, the government poured out $50 billion and $12.5 billion in aid to the two automakers respectively.

    But besides taking the bankruptcy route, both companies made substantial changes in the lineups of their vehicles to ensure fuel efficiency and quality. Chrysler plans to unveil 16 all new or refreshed models this year. Ford on the other hand, has been promoting its Fusion hybrid car as it competes with Toyota’s Prius, the most popular gasoline electrical car. Ford plans to introduce its plug-in Volt will be introduced in October, a month ahead of schedule.

    All three automakers benefited from Toyota’s debacle when it recalled 8 million of its vehicles from US roads since September due to accelerator and brake pedal problems. This resulted in Toyota’s market share dropping to 15.2% in the first quarter from 16.3% from the previous quarter. At the same time, GM’s and Chrysler’s market share increased.

    Nevertheless, there is still work to be done for the auto giants. Toyota’s labor costs of $50 an hour is still the cheapest among the automakers, Ford is still struggling with debts, Chrysler’s quality still leaves much to be desired and GM has already had 3 CEOs the past year. GM booted out Fritz Henderson as its CEO December 1 before hiring someone new besides also twice revamping the marketing department. But the massive government cash injection has enabled GM to challenge Ford, the nation’s no. 2 carmaker, whose $34 billion in automotive debt is a huge burden.

    Industry-wide total vehicle sales still fall short by about one third compared to the annual average over the past ten years despite significant gains by about 20%.

    St Pete sues Wachovia as Bankruptcy spreads

    The city of St. Petersburg has taken up a lawsuit against its financial advisor, Wachovia Bank. The suit was filed in US District Court in Tampa, Florida and stems from Wachovia’s failure to warn the city of the impending collapse of Lehman Brothers Holdings Inc. At the time of the collapse, St. Petersburg was holding $15 million worth of Lehman bonds. Needless to say, after Lehman filed what turned out to be the largest bankruptcy filing in US history, the bonds were practically worthless. The city contends that Wachovia bank should have sounded the alarm bells to it when credit rating agencies drastically downgraded Lehman’s ratings during the spring and summer of 2008. Having lost $15 million, the city attributes it to Wachovia’s inaction over Lehman’s impending collapse.

    In court papers, St. Petersburg stated that because Wachovia remained silent during the crucial period when Lehman’s ratings were sliding down, it deprived the city of the opportunity to sell off the bonds before it was too late. Court papers go on to show that Wachovia only alerted city officials on September 16, 2008, one day after Lehman filed for bankruptcy by which time, the bonds were not even liquid anymore. Unfortunately for the city, it used the bonds to participate in some sophisticated and risky lending programs administered by Wachovia. The bonds were in turn loaned to others and when they became worthless, the city had to pay $15 million in cash to compensate the borrowers.

    In its lawsuit, the city seeks an unspecified amount in punitive damages and compensation. On its part, Wachovia denies all allegations in the suit. Under its new owner, Wells Fargo & Co., the bank intends to fight the case. In its defense, the bank puts forth its contention that at the time St. Petersburg purchased the bonds, they were rightly valued.

    Admittedly, the whole episode served as a rude wake-up call to the city officials. But St. Petersburg is not alone in its financial turmoil. Many other cities in various counties are similarly plagued with fiscal problems of their own. The Lehman bankruptcy in particular, hit dozens of other communities in counties across 20 states in the country. One example is Sarasota County that owned $40 million in Lehman bonds. No prizes for guessing who Sarasota County’s financial advisor was. Altogether, Florida communities lost in excess of $456 million.

    Somewhat fortunately for Sarasota County, it did not sell its Lehman bonds, instead it recorded them as unrealized losses in its books for 2008. Since then, the value of the bonds have risen as the bonds continued to mature and allowed the county to record them as unrealized gains in their books in 2009.

    On the other hand, St. Petersburg had to write down their losses from the Lehman bonds in their books in 2008.

    Restaurant BT Files for Bankruptcy

    Popular restaurant BT at Hyde Park Village in south Tampa has filed for Chapter 11 bankruptcy protection Friday. Its owner BT Nguyen, has acknowledged being behind on her rent and filing for bankruptcy to avoid being evicted. Chapter 11 bankruptcy allows the filer to restructure debts while being protected from creditors. Nguyen has declared that her restaurant will continue its operations as they work through the bankruptcy procedures.

    On Monday, Nguyen explained the sequence of events since May last year when she began to realize she could not keep paying her $14,600 monthly rental. She negotiated with her landlord to pay in 4 equal weekly installments of $3,600. But she fell behind by June 2009. She also began paring staff and her operations. She tried holding special events and giving cooking classes. She advertised by distributing fliers. She also reduced her overheads and declined taking a salary for herself.

    Also in May 2009, she sent a letter to Vornado Realty Trust, one of the owners of the mall she was operating in, to ask for its help to see her business through the difficult period. In her letter, Nguyen noted that she was paying a much higher rental than the industry standard of about 8% of sales (her rental was more than 16% of her restaurant’s revenue). Her letter also contained her proposal to move to a smaller lot in the mall. But despite sending her letter on 4 occasions, she received no reply, not even an acknowledgement of receipt. The last time was about 2 weeks ago, addressed to Chuck Taylor, vice president of Madison Marquette, the managers of Hyde Park Village.

    In her last letter, Nguyen said that she finally could afford to pay her rental in full in March this year, offering to pay her current rental in addition to $5,000 in back rentals. Unfortunately, the managers of Hyde Park Village had turned her case over to their lawyers. This event compelled Nguyen to seek bankruptcy protection in an effort to avoid being evicted.

    In bankruptcy papers, Nguyen listed her assets of between $100,000 and $500,000 and her liabilities of approximately the same amount. She says she is up-to-date on her debts with vendors and considering all that she has been through, the executives of Madison Marquette have not considered other options before sending her case to their lawyers. Nevertheless, all that has happened has only served to strengthen her resolve even more to succeed in her business, if nothing but to show them she can do it.

    On the Bankruptcy Front

    Bashas Supermarkets Negotiate Bankruptcy

    Bashas’ Supermarkets Inc., the owner of the local chain of grocery stores is in the process of negotiating with its lenders an amicable agreement to ‘avoid costly litigation, shorten the (bankruptcy) confirmation process and create a plan that would ensure a successful reorganization’. This negotiation has been ongoing since the company filed for Chapter 11 bankruptcy in July last year. Since that time also, the grocery store chain has closed about 30 of its stores. The bankruptcy court judge has given all parties another 30 days to come to an agreement.

    The 3 parties to the negotiation are Bashas’ Supermarkets Inc., their secured lenders like Wells Fargo Bank, Bank of America, BBVA Compass and a group of insurance companies and the unsecured lenders that mainly comprise of suppliers and distributors like Shamrock Farms. Bashas’ Supermarkets total debt according to bankruptcy records come up to about $300 million. Secured creditors are owed about $210 of that amount whereas unsecured debts amount to about $68 million.

    Bahas’ original proposal was to bundle its debts and Chapter 11 reorganization together with that of associated companies, Leaseco Inc. and Sportsman’s LLC. This was opposed by the secured creditors.

    On the other hand, the unsecured creditors are concerned if bankruptcy proceedings go against them especially if the company ends up being sold. As a matter of fact, in February Bashas’ rejected an offer to buy them out worth between $260 and $290 million made by Albertsons LLC.

    Ex-NBA Player files for Bankruptcy

    Derrick Coleman, an ex-basketball player with NBA outfit Detroit Pistons, has filed for Chapter 7 bankruptcy last March 2. He has listed debts amounting to $4.7 million and assets worth just over $1 million. Among his unsecured, non-priority debts was a personal loan he had received from Detroit Mayor, Dave Bing, himself an ex-Piston player.

    After a 15-year NBA career that ended in 2005, Coleman went into various businesses. His interests range from real estate to food. He owned stakes in Detroit’s Sweet Georgia Brown Restaurant (that closed in February), franchises in Hungry Howie’s Pizza and Tom Horton’s Doughnuts.

    Among his assets, Coleman listed a 1997 Bentley convertible worth $50,000, two chinchilla and three mink fur coats worth $15,000 and jewelry worth $3,000. Among his main secured creditors is TMST Home Loans Inc., to whom he owes just over $1 million and JP Morgan Chase, a creditor for about $400,000.

    In his bankruptcy filing, Coleman stated that he intended to keep his and his mother’s Beverly Hills home worth $168,000 and $191,000 respectively. Not too long ago, the Detroit Economic Growth Corp. sued Coleman for allegedly defaulting on a $200,000 loan.

    MPG Terrapin Files for Bankruptcy

    MPG Terrapin Ltd, a subsidiary of Prestige Group has filed for Chapter 11 bankruptcy in a bid to reorganize its operations and finances. This move to file for bankruptcy is done largely to try to hold on to a major shopping center worth about $37.2 million located in Margate, just 20 minutes northwest of Fort Lauderdale. The shopping center in question is the Coral Landings III, a massive 115,000 square foot retail center whose tenants include well known names like Best Buy Co. Inc., HomeGoods from TJX Cos. Inc., and Jo-Ann Stores Inc. The mortgage holder of the shopping center has been Wachovia Bank, a subsidiary of Wells Fargo & Co. since 2006.

    Broward County court records show that on March 16, the day after MPG Terrapin filed Chapter 11, Wachovia was scheduled to conduct an auction for the shopping center on the courthouse steps. The bank already had initiated foreclosure proceedings on Coral Landings III since January.

    Charles Monroe III owns Prestige Group Inc, the holding company of MPG Terrapin Ltd and once regarded as one of the largest commercial property developer in Tampa Bay. But the slump in the housing and real estate industry has hit property developers really hard in the state causing even successful firms to be brought close to the verge of bankruptcy.

    According to bankruptcy court records, MPG Terrapin holds up to $50 million in assets and liabilities and owes all of the $37.2 million on Coral Landings III to Wachovia Bank. But the banks are also after other properties owned by Monroe’s Prestige Group. It also faces foreclosure on properties in Miami, Parkland, Boynton Beach and Coral Springs.

    Often the financial health of a group of retail companies is severely affected by the worst performing ones, much like the strength of a chain being its weakest link. Despite some of its retail outlets making money, the ones losing money have a greater effect on the group. This has been very much the experience of Prestige Group, although no one knows for sure. Efforts to communicate with the company have not borne fruit and previous court records show the company pinpointing lenders’ paperwork errors as the reasons for its financial problems.

    Other companies under Monroe’s control that have sought bankruptcy protection include MPG Jupiter Ltd. that filed to save a shopping center in Jupiter. It had its bankruptcy case closed by the court earlier this week after MPG Jupiter claimed it could settle the outstanding debt on the property.

    Other retail companies could suffer the same fate especially those that secured financing during the housing boom when property prices were inordinately inflated.

    Detroit Heading Towards Bankruptcy

    A recent report entitled, ‘The Fiscal Condition of the City of Detroit’ by the Citizens Research Council of Michigan concluded that unless drastic measures are taken to address the burgeoning budget deficit, the city of Detroit could end up bankrupt or under state receivership.

    The city’s overheads in government spending at its present rate looks set to overshoot its $1.6 billion budget by between $446 and $466 million. The report recommends that the city restructure its government in the face of twin realities of the day, firstly reduced tax revenue collection and secondly the state government’s inability to provide shared revenues. The report, compiled at the behest of the city’s business community through a coalition called Business Leaders of Michigan, details the challenges faced by the city, among which are a dwindling population and a high rate of unemployment.

    The 60-page report goes on to put forth its argument that the city council must respond to these challenges by downsizing and making draconian budget cuts. This point has been acknowledged by Detroit Mayor Dave Bing who knows he faces a herculean task of revamping the city’s operational and financial structure.

    The report goes on to describe how bad decisions when drawing up the city’s budget had had a detrimental effect on the city leaving it with having to make tough choices as a consequence. For example, last year the city planned to sell the Detroit-Windsor Tunnel and the Detroit Public Lighting Department. These sales were expected to contribute towards a sum of $275 million in revenue that were added into the city’s budget for last year. But within the entire fiscal year, the sales did not materialize thus resulting in a drastic revenue shortfall. It does not take a genius to figure out that eventually, the city will have to pay for this indiscretion in their budget decision.

    This report can be read online at www.crcmich.org and was released just as the Mayor was about to give his budget speech to the city council. Mayor Bing’s director of communications, Karen Dumas said that the CRC’s recommendations do warrant due consideration by the city authorities. She also said the city council was fully aware of the city’s shrunken tax base and the need for operational restructuring in the city government. However she stated that the implementation of such restructuring and its fruition in terms of results would take time.

    Riverview Bankruptcy

    When an individual’s gets rid of all their debt with the help of the federal court system it is called bankruptcy. Those who file this type of bankruptcy give up any property that they own and it is sold in order to pay off their debts. During a bankruptcy process an individual’s assets is liquidated In the state of Florida, certain bankruptcy exemptions laws exist that keep creditors from taking certain types of property during bankruptcy. Anyone who is contemplating filing for bankruptcy should be aware of these exemption laws. There are federal and state laws that provide bankruptcy candidates with helpful exemptions.

    Each exemption explains in great detail what is not included in bankruptcy. Most people generally wonder where they will take their family after their home is seized. The good news is according to the Florida Homestead Exemption, your home is protected from creditors. Florida law clearly states that homes are safe during bankruptcy procedures and cannot be seized by creditors. However, you should know that a few important stipulations do exist.

    The size of any property located in the city cannot be more than 1/2 acre.   You or your spouse can use the Homestead Exemption when filling bankruptcy. When you file bankruptcy you, your spouse or your child can claim your home as a legitimate debt and it is protected according to the Homestead Exemption. This is the reason why people still get a chance to keep their million dollar homes even after filing bankruptcy. This exemption works regardless of the amount of money that is involved. You should also know that when you file bankruptcy in Florida your pension is protected.

    Creditors are not allowed to seize any retirement checks, IRA’s or other governmental income that you may receive. It is important to note that your life long pension savings will not be involved in your bankruptcy proceedings. In addition workers compensation, alimony, child support and unemployment are a few other examples of benefits that are exempt from bankruptcy and off limits to creditors. Parents should keep in mind that if they have a Prepaid College Fund it will not be affected when they file bankruptcy. Accounts where you have put aside money for your child are not involved in bankruptcy proceedings. In addition any money that you have put into a Medical Savings Account is safe and secure under the Florida exemption laws. If you are filing bankruptcy in Florida you should be aware of your options.

    For those who are trying to get started they may want to seek help from a lawyer or research an online bankruptcy website. The list of exemptions are a great way of helping Florida bankruptcy victims and it is vital that every eligible resident take advantage of them. Tampa Bankruptcy Attorney, Darrin T. Mish has been helping debtors with debt problems for over a decade. At the Tampa Bay Bankruptcy Center we really care! To get more information on your bankruptcy options visit his website at: http://tampabankruptcy.pro.

    Largo Bankruptcy Laws

    Bankruptcy, which can affect and individuals or a business, occurs when someone gets rid of all their debt by going through the federal court system. Those who file this type of bankruptcy give up any property that they own and it is sold in order to pay off their debts. When people undergo this type of bankruptcy they are liquidating their assets. However, in Florida there are some exemptions in the bankruptcy process which prevent debtors from being able to seize certain items. Anyone who is contemplating filing for bankruptcy should be aware of these exemption laws. Bankruptcy is never an easy process but there are both federal and state laws that provide helpful exemptions.

    Each exemption explains in great detail what is not included in bankruptcy. Most people wonder how they will survive and take care of their family after their home is seized. The Florida Homestead Exemption makes sure that your home is protected from creditors. According to Florida law during a bankruptcy procedure your home is protected and creditors cannot take it. There are a few additional conditions that go along with the exemption.

    The size of any property located in the city cannot be more than 1/2 acre.   Once these conditions are met you, your spouse or even your child can save the home under the Homestead Exemption when filing bankruptcy. Even people who have a million dollar home are able to save the property during bankruptcy proceedings. This exemption works regardless of the amount of money that is involved. Your pension or retirement is protected from bankruptcy proceedings in Florida.

    For those people who receive a disability check or contribute to a retirement account their funds are protected from seizure. It is important to note that your life long pension savings will not be involved in your bankruptcy proceedings. Creditors do not have access to your workers compensation, alimony or child support during bankruptcy proceedings. Prepaid College Funds and other types of prepaid savings account are protected during bankruptcy. Your college accounts are safe during your bankruptcy process. In addition any money that you have put into a Medical Savings Account is safe and secure under the Florida exemption laws. As a Florida resident it is very important to be aware of all of your available bankruptcy choices.

    A bankruptcy lawyer or even an online website are great places to get started when trying to find out more about bankruptcy. If you are a resident of Florida, the exemption laws are designed to help you so it is important that you take advantage of those that you are eligible for. Tampa Bankruptcy Attorney, Darrin T. Mish has been helping debtors with debt problems for over a decade. At the Tampa Bay Bankruptcy Center we really care! To get more information on your bankruptcy options visit his website at: http://tampabankruptcy.pro.

    Where to Find Information on Bankruptcy

    The federal court system assists those who are filling bankruptcy by helping them to get rid of their debt. A business or an individual can file bankruptcy and attempt to get rid of all their debt by going through the federal court system. Your property is sold in order to pay off your debts. This process is called a liquidation of assets. In the state of Florida, certain bankruptcy exemptions laws exist that keep creditors from taking certain types of property during bankruptcy. If you are thinking about starting a bankruptcy procedure it is important to know about these laws. Individuals can benefit from helpful federal and Florida state bankruptcy exemptions.

    Each exemption explains in great detail what is not included in bankruptcy. Most people wonder how they will survive and take care of their family after their home is seized. The good news is according to the Florida Homestead Exemption, your home is protected from creditors.   However, there are a few stipulations that go along with this exemption.

    All property that is located in the city and it exempted cannot be larger than 1/2 acre.   If these conditions are met, you, your spouse or even your child can claim the property as a debt during a bankruptcy and it is protected under the Homestead Exemption. This is how people who file bankruptcy are still able to keep their million dollar homes. Regardless of how much money your home is worth you get a chance to keep it. When individuals go through bankruptcy proceedings in Florida their pension is protected.

    According to bankruptcy laws creditors cannot seize your retirement, disability or any other government assistance income that you receive. Creditors cannot liquidate your pensions because they are exempt from your bankruptcy. Creditors do not have access to your workers compensation, alimony or child support during bankruptcy proceedings. Creditors cannot touch these types of accounts where you have put aside money for your children’s college. Creditors cannot touch these types of accounts where you have put aside money for your children’s college. Money that you input into a Medical Savings Account is secure during bankruptcy. All Florida residents should be aware of their bankruptcy options.

    If you need to find out more information about bankruptcy, consult a bankruptcy lawyer or an online website for more information. The exemptions are designed to help Florida residents so each and every resident of the state is eligible to take full advantage of them. Tampa Bankruptcy Attorney, Darrin T. Mish has been helping debtors with debt problems for over a decade. At the Tampa Bay Bankruptcy Center we really care! To get more information on your bankruptcy options visit his website at: http://tampabankruptcy.pro.