Tuesday, March 31, 2009

Bankruptcy: Your LAST Alternative

By Kaitlin Lanier

On a personal level, bankruptcy has become a very popular option when debt accumulates. According to the American Bankruptcy Institute, more than 2 million personal bankruptcies, those filed by individuals rather than businesses, were filed in 2003, which is a record number. In fact, since the early 1990s, the number of personal bankruptcies filed has increased at an average of 20 percent per year. However, despite its popularity, bankruptcy should be the last alternative to resolving credit management difficulties. As expected, there are many disadvantages to filing bankruptcy:

  • Ruined Credit History: A bankruptcy will appear on your credit record for ten years and may affect your ability to obtain a home mortgage or other credit in the future. This long-lasting impact may outweigh the benefits of debt reduction accomplished through the bankruptcy proceedings.
  • Costs: Despite the fact that you are filing for bankruptcy, there are still certain costs that are associated the proceedings. Court costs, attorney’s fees, and trustee’s fees all need to be considered.
  • Property repossession: Declaring bankruptcy can result in losing valuable assets or equivalent cash value. You may need to part with your most prized possessions. Also, since you can expect all your bank accounts and credit cards to be closed when you file for bankruptcy, anything you are leasing, such as a car, will be return to its owner.
  • Stained social status/hampered life: On a more personal note, declaring bankruptcy can definitely spoil your social status. Also, those who decided to declare bankruptcy may find it extremely difficult to buy or rent a home, acquire insurance, or buy or lease a car. This can lead to a lot of problems, especially not having a safe and secure lifestyle.

Personal Finance: Skills for Life by Vickie Bajtelsmit
Avoid Bankruptcy—Myths, Reality, and Alternatives by Debt Consolidation Care
Avoiding Bankruptcy by Jonathan D. Pond

Chapter 11 Bankruptcy

By Craig Rozelle

Chapter 11 bankruptcy is a form of corporate financial reorganization in which a company's assets get sold off to pay creditors. In some cases, Chapter 11 bankruptcy allows companies to continue to function. The benefit of Chapter 11 over other forms of bankruptcy is that businesses are allowed to continue to operate and will generate revenue, protect jobs, and eventually be able to pay off creditors. Scraping and selling businesses for their parts, on the other hand, may lead to less than optimal utilization of company resources. Chapter 11 bankruptcy filings may be “strategic”. In other words, management may wish to reorganize for political reasons, not simply for the sake of balancing books. Individuals may also apply for chapter 11 occasionally but generally it is reserved for companies. There are certain large publicly vested entities which are legally not allowed to file for Chapter 11 bankruptcy. Insurance companies, utilities, and certain conglomerates may not have the privilege of filing and may thus have to reallocate or redistribute funds to creditors under other applicable laws. In large-scale bankruptcy cases, the federal government can get involved. Much of Chapter 11 bankruptcy case law is devoted to the finding what constitutes asset exemptions under the law.


Bankruptcy Basics

Posted by: Thomas Gillick

Almost all people have some form of debt including loans, credit card debt, and mortgages. While some people have no problem paying back this debt some people have trouble paying off their debts while their debt gets worse and worse. For these people there are options to help them out. The most extreme of these options is filing for bankruptcy. There is a few things you should be aware of before actually filing for bankruptcy. Bankruptcy is way to help creditors relieve their debt although your assets may be at risk. The two most commonly known types of bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Under Chapter 7 you’re discharged from your debt within 90 days and brings you back to zero. Chapter 13 allows for protection of your assets. This is a longer process, which is usually 3-5 years. Under this a piece of your disposable income goes towards your debt. Both of these seem pretty good but of course bankruptcy should only be filed when absolutely necessary. Filing for bankruptcy can do damage to your credit rating. It is more often then not a better idea to talk to a lawyer to see if there a possibly ways to repay your debt before filing for either of these bankruptcies.


Obama Says GM, Chrysler Have Last Chance to Survive

Article by John Hughes, Jeff Green, and Doron Levin
Posted by Kaitlin Lanier

President Barack Obama gave General Motors Corp. and Chrysler LLC deadlines to “fundamentally restructure” or lose government aid that has kept them alive.

Obama rejected the companies’ recovery plans and forced GM Chief Executive Officer Rick Wagoner to resign. He gave GM, the biggest U.S. automaker, 60 days to develop a new strategy. Obama said No. 3 Chrysler can’t survive on its own and gave it 30 days to complete a partnership with Italy’s Fiat SpA.

In a decision that surprised lawmakers and analysts with its toughness, Obama said at the White House today “we cannot continue to excuse poor decisions” and “cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars.” The administration may use bankruptcy to “help them restructure quickly and emerge stronger,” he said.

Click here to read more.

Monday, March 30, 2009

US Stocks Decline Amid GM, Chrysler Bankruptcy Talk

by Shu Zheng

U.S. stocks declined on Monday after the Obama administration said that the best chance for success for General Motors and rival Chrysler may be bankruptcy.

The Dow Jones Industrial Average was down about 220 points. All its components were lower. GM shares, which have slumped to their lowest levels in decades in recent months, were down more by than 24% early on, falling below $3. Given the shares' low price, however, the decline took less than 10 points off the Dow.

Blue-chip banking stocks also dropped. Bank of America and Citigroup fell by more than 10% each, and J.P. Morgan Chase slid 6.5%. The S&P 500 declined 3%, weighed down by a 5.5% decline in its financial sector. Goldman Sachs Group shares were down about 4%. Morgan Stanley fell 6%. The Nasdaq Composite Index declined 3%.

Charity Moved $1 Million Before Bankruptcy Filing

Posted By: Asim Mohammed

Two days before it sought Chapter 11 bankruptcy protection, calling itself "unable to meet its obligations,'' the National Heritage Foundation wired $1 million to an affiliate charity, new court filings show.

The transfer by the large, controversial Falls Church, Va., nonprofit to Congressional District Programs Inc. kept the money, at least for the time being, out of the potential reach of NHF's outside creditors. However, the move raises many questions and is likely to be a focus of attention when those creditors gather to question an NHF representative under oath on Thursday.

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Corporate Bankruptcy - What Every Investor Should Know

Posted By: Brendan Boesch
What happens when a public company files for protection under the federal bankruptcy laws? Who protects the interests of investors? Do the old securities have any value when, and if, the company is reorganized? We hope this information answers these and other frequently asked questions about the lengthy and sometimes uncertain bankruptcy process.

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Age and Bankruptcy Correlation

From The Third Branch

Posted by Jenny Sutton

Is there a relationship between age and filing for bankruptcy? A new study shows that the bulk of bankruptcy filings are filed by the middle-aged.

John Golmant and Tom Ulrich, statisticians in the Administrative Office’s Statistics Division, gathered data from over 13 million records, with information on Chapter 7 and Chapter 13 consumer bankruptcy filers. Random sampling selected 2,800 records with data covering 88 of the 94 districts for the years 1993 through 2002. The results of the study were presented at the 15th Federal Forecasters Conference and published in the May issue of the American Bankruptcy Institute Journal.

GM not ruling out bankruptcy

Posted by: Thomas Gillick

WASHINGTON (AFP) – Ailing US automaker General Motors, asked by the White House to produce a more aggressive restructuring plan for further state aid, said Monday that it was not ruling out bankruptcy as an option.

"Our strong preference is to complete this restructuring out of court," GM said in a statement after the White House pressed the company for "more aggressive" restructuring to qualify for more state aid.

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Nardelli, Defying Skeptics, Digs In to Save Chrysler

AUBURN HILLS, Mich. — In his office at Chrysler’s world headquarters, Robert L. Nardelli, the chairman, works standing at an elevated desk. He thinks better on his feet, he said, even when he uses his computer.

But with the automaker Chrysler on the brink of insolvency, his legs must be getting sore.

Just two weeks remain before a presidential task force is scheduled to decide whether to save Chrysler and endorse its viability plan, and Mr. Nardelli has been putting in long hours to help save the company.

He prefers to wave off any discussion about his role as a central player in those efforts. “It’s not about Bob,” he said Monday in an interview. “If we’re able to do this, it’s because these people here have put together a plan we believe in.”

But, as the executive in charge, it inevitably is about Mr. Nardelli and his reputation. After his abrupt departure as chairman of the retailer Home Depot, Mr. Nardelli was viewed by many in the auto industry as a short-term chief executive when he was installed by Cerberus Capital Management after the private equity firm bought Chrysler in August 2007. Industry observers expected him to streamline Chrysler so Cerberus could sell it.

But in the 19 months since, Mr. Nardelli has become a passionate leader of Chrysler. Like Lee Iacocca in the 1980s, Mr. Nardelli, 60, is trying to make the case that the American auto industry is better off with Chrysler than without it.

“Quite honestly, we are in a survival mode,” he said. The company needs an additional $5 billion in government loans to survive, on top of the $4 billion it has received.

Chrysler’s updated restructuring plan, filed Feb. 17 with theTreasury Department, asserts that, if it receives an additional loan, it can stabilize its finances and grow beyond its core North American market. President Obama’s task force is now weighing that argument.

Click Here to read the rest of the article

Sunday, March 29, 2009

21st bank failure this year

Posted by Craig Rozelle

Bank regulators closed a Georgia-based bank Friday, marking the 21st bank to be shuttered this year, according to a statement from the FDIC.

Earlier in the afternoon, the Office of the Comptroller of the Currency (OCC) announced that the Federal Deposit Insurance Corporation (FDIC) was named the receiver for the Omni National Bank, based out of Atlanta, Ga.

The FDIC entered into an agreement with the SunTrust Bank, also based in Atlanta, Ga. to protect the depositors.

The FDIC expects the cost to its Deposit Insurance Fund to be $290 million.

Click here for full article

Bankruptcy as a last resort

By Nicholas Hall

With foreclosures at an all time high and rising at a disturbing rate, and with consumer debt is over $2.5 trillion dollars many people have turned to bankruptcy as a last resort. There are a few things that you should know about bankruptcy before filing. It isn’t a way out of your financial troubles, but in many cases it may help out.

It is important to first understand what bankruptcy is. The first thing you should do is get the statistics, you need to understand the numbers and the consequences. Declaring bankruptcy will really hurt your credit score, making it very difficult to secure loans and financial help for at least 10 years. This will also hurt you chances of getting a new job or getting insurance. Declaring bankruptcy will also not get you out of paying your mortgage or car loans, so make sure you consider that.

Before even thinking about filing you should go to a credit counselor to discuss any possible alternatives, remember this is a last resort. If nothing else, declaring bankruptcy will at least delay foreclosure or payments until you have better means of payment. Make sure you know the rules and understand exactly what you are getting yourself into. Bankruptcy won’t dissolve all your debts; make sure it is the right move for you.





February consumer bankruptcies up 29%

Posted by Nicholas Hall

Bankruptcy filings by American consumers surged in February, according to a new report Wednesday. 98,344 consumers filed for bankruptcy protection last month, up 29% compared with 76,120 filings a year ago, The American Bankruptcy Institute said. Filings rose 11% versus January.

The ABI, a non-partisan research group, also expects bankruptcies in 2009 to surpass last year's 1.06 million filings. "We expect at least 1.4 million bankruptcies this year," said ABI Executive Director Samuel Gerdano in a written statement.

Gerdano said the total could be even higher if Congress changes bankruptcy laws this week. House legislators are expected to vote on a bill that would allow bankruptcy judges to reduce the principal and monthly payments on mortgages for borrowers in Chapter 13 bankruptcy protection.

click here to read the full article.

The "Perfect Storm" bankruptcy and the economy

Posted By Jen Lynch

By Christine Dugas, USA Today

The current financial crisis is all-inclusive; our path to prosperity or even simple financial stability seemingly obliterated.
With every furlough, layoff or stock market drop, Americans of all ages and backgrounds are seeing their incomes dwindle, bills pile up and financial options disappear.

The number who are suffering has increased by 3 million the past year, according to a recent Gallup-Healthways survey. Some 37% of us said we were worried about money last week. Last year, 3.2 million consumers contacted the National Foundation for Credit Counseling, up from 2.2 million in 2007 and 1.4 million in 2006.

Retirement on the line

The elderly have been harder hit than most. Personal bankruptcy filings among those 65 and older jumped 150% from 1991 through 2007, according to a study released last year by AARP. Although they have been known as the most frugal savers, today, many of them are deep in debt and without a safety net.

To read more Click Here

Thursday, March 26, 2009

Bankruptcy Trouble

By: Jeffrey Kam

In today’s economic world, my companies are facing different kinds of financial issues. Either receiving money from the government or filing bankruptcy, 2009 is not going to be a good year for many companies in different industries. Airline industry companies have been in the economic crisis since 9/11, which made them re-structure they strategy to become more efficient. International Airport Association estimate that $4.7 billion loss in 2009 nearly doubles from the past. Due to sudden fuel spikes, America Airline companies estimates that their revenue will decline in 2009. Companies have tried to do everything such as lay off, reducing capacity, and lower prices in order to avoid bailout and more importantly bankruptcy.

Besides the airline industry, American auto industries (General Motors and Chrysler) are also facing a lot of financial trouble as declining sells increases. They have received a large amount of money from the government in order to avoid bankruptcy trouble. Besides bailing out, they also have laid off numerous workers to save labor cost. They also have remove many assets from the offices itself such as clocks and light bulbs and saved up to $470,000 on batteries and electricity.Although these companies are currently receiving bailout from the government, but debates have suggested that these bailouts maybe the pre-package of bankruptcy filing.




Wednesday, March 25, 2009

Great Obama bankruptcy?

Copied and Pasted by: Jeffrey Kam

Since the inauguration of President Barack Obama, there has been a lot of talk among Republican legislators, as well as conservative commentators, about the dangers of a large deficit. The main consensus amongst these figures is that the Obama administration is leading the nation down a path of fiscal irresponsibility that could bring us to the brink of disaster later on. No doubt, there may be some truth to all these concerns about the deficit. After all, someday, the United States will be called on to pay the piper (in this case, the Chinese) for all the debt that we have accumulated.

These concerns once again were aired Sunday morning on CNN’s “State of the Union,” where Sen. Judd Gregg (R-NH), former Obama appointee to be Secretary of Commerce and ranking member of the Senate Budget Committee, expressed grave doubts about Obama’s new budget.

“The practical implications of this is bankruptcy for the United States,” Gregg said speaking with CNN’s John King. “There’s no other way around it. If we maintain the proposals that are in this budget over the ten-year period that this budget covers, this country will go bankrupt. People will not buy our debt, our dollar will become devalued. It is a very severe situation.

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Tuesday, March 24, 2009

What happened during the meltdown?

Written by Amina Isakovic

Here is a brief history of what happened in the past year and a half and how we got to the $700billion.

• In the summer of 2007, the housing market was in huge trouble. The prices started falling and foreclosures were quickly piling up.
• In June, 2007, two Bear Sterns hedge funds were forced into bankruptcy. The funds were invested in so called “AAA” rating mortgage backed securities. The value of these securities had plummeted fast and Bear Sterns didn’t have the cash to fix it quickly.
• Due to rumors of Bear Sterns running out money, on March 10, 2008 Bear Stearns stock starts falling in the morning and went from an average of $171 to $60 in the afternoon. The CEO of the company, tried to win back investor trust by going on CNBC, but it didn’t really work.
• March 15, 2008 hundreds of lawyers and accountants look through Bear’s books to see where the company really stands.
• March 16th, the Fed creates a deal and covers $30billion of Bear’s toxic loans, while JPMorgan buys Bear at $10 a share. This was suggested by Treasury Secretary Henry Paulson, who worked very closely with Fed Chief Ben Bernanke. Paulson is all about the moral hazard.
• On September 5th, Fannie and Freddie are told that the government will take 80% ownership in each, and will give them $200billion in capital.
• September 12, Lehman Brothers’ books are looked at, since they seem to be heading in the same direction as Bear. On the 14th, Lehman is forced to file for bankruptcy. On the 17th, Paulson announced this, and at the same time, the markets just started crashing.
• September 20th, an emergency bill is sent to congress by Paulson, requesting $700billion to get rid of all of the toxic loans and the mess that has been created.
• After first rejecting it, on October 8th, the house finally passes the bill.

And here we are in 2009, with one of the worst economies since the depression. Who do we blame it on? Bernanke, Paulson, or the banks for the toxic investments?

*the dates can be found at Frontline*

Monday, March 23, 2009

Home sales rise 5%!

Posted by Amina Isakovic
Written by Ben Rooney

NEW YORK (CNNMoney.com) -- Sales of existing homes unexpectedly rose in February, recovering from a sharp drop in the previous month, according to an industry report released Monday.

The National Association of Realtors said that existing home sales rose last month to a seasonally adjusted annual rate of 4.72 million million units, up 5.1% from a rate of 4.49 million in January. February sales were down nearly 5% from year ago levels.

Economists surveyed by Briefing.com were expecting existing home sales to decline to 4.45 million.

The report said first-time buyers made up half of all purchases in February, and that sales of distressed properties accounted for about 45% of all transactions.

Sales were unexpectedly strong in the West, with activity increasing more than 30% over last year.

Click Here to read more.

What happened to the $700 Billion?

Posted by Amina Isakovic
Written by David Goldman

NEW YORK (CNNMoney.com) -- Remember that $700 billion financial sector rescue plan from October? It's all but spoken for.

After Treasury Secretary Tim Geithner promised to spend up to $100 billion on a toxic asset purchase plan Monday, only $10.2 billion remain unallocated in the Troubled Asset Relief Program.

After former Treasury Secretary Hank Paulson determined how Treasury would spend up to $460 billion of the funds in his tenure, the new administration has committed another $230 billion in just two months. But with the government's rescue programs still incomplete, Geithner may need to ask for more.

(For a look at how Treasury and other government agencies have used taxpayer dollars to rescue the economy, click here.)

"Secretary Geithner is going to need to go to Congress and ask for more money sooner rather than later," said Anne Vorce, policy director at the New America Foundation, a public policy think tank. "He's done everything possible not to go back to Congress, but now the amount left is a worry."

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Will the deficits bring us to bankruptcy?

Posted by Amina Isakovic
Written by Tom LoBianco

One of President Obama's top economic advisers said massive increases in domestic spending can't wait - even as federal spending continues to mount, with new plans to spend $1 trillion to buy toxic bank assets and an independent report that the White House undershot the nation's debt by $2.3 trillion.

But Republican lawmakers have become increasingly skeptical of Democratic spending plans, presenting some of their most dire forecasts Sunday.

Sen. Judd Gregg, New Hampshire Republican and one-time Obama pick to lead the Commerce Department, said the combination of new spending could cause the nation to go bankrupt.

Christina Romer, chairman of the White House Council of Economic Advisers, said Mr. Obama's domestic budget priorities, including major reforms in health care, education and the environment, must be kept in the budget as Congress takes control of the spending document.

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Tribune bankrupt

To Follow up on an earlier blog about newspapers filing for bankruptcy, the following is an example that explains the details of the situation. The Chicago Tribune recently filed for bankrupcty. Here is a link to a New York Times article that reports it.

Posted by: Matt Smith

Geithner's Plan "Extremely Dangerous," Economist Galbraith Says

Copy and pasted by Po-cheng Huang

False approach

By Po-cheng Huang

This is RIDICULOUS!!! Now the Treasury is going to get private investors together, alongside with the government to buy about 500 billion dollars worth or mortgage back securities to help the struggling banks to get the so called “bad assets” off their balance sheet. It is already clear that the U.S. is going to face something around 12 to 15 trillion dollars in deficit by 2011, and with the Fed continuing printing money, we can expect inflation heating up again, which puts even more pressure on the majority of Americans who have already been hammered hard by the recession. Under such circumstances, middle-class to low income Americans, who made up more than 60 percent of the U.S. population, gets hit hard by the weakening dollar and raising price on almost everything, such move from the government will just provide a greater force in pushing these struggling families further into declaring bankruptcy and those who are already bankrupted face bigger challenge. Speaking of the actions taken by the government to help revive the economy, those are not directly fixing the problems, the economy is not slowing down just because if the liquidity issue, but more of a consumer behavior problem. Americans are simply overspending, overborrowing, and the biggest joke of all, is that the officials are still saying that spending is what keep the economy growing, and it is important to have the banks continue to lend out money to business and people who are high risk borrowers that likely to default.


Treasury unveils 'bad asset' plan

Copy and pasted by Po-cheng Huang

Under the new so-called "Public-Private Investment Program," taxpayer funds will be used to seed partnerships with private investors that will buy up toxic assets backed by mortgages and other loans.

Nobel laureate Krugman slams Geithner bailout plan

Copy and pasted by Po-cheng Huang

Nobel-prize winning economist Paul Krugman said in remarks published on Monday that the latest U.S. Treasury bailout program is nearly certain to fail, triggering a sense of personal despair. Skip related content

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As bankruptcy filings mount, attention turns again to reform

Copied and Pasted by: Jeffrey Kam

Cash-strapped families are seeking bankruptcy protection at nearly the same rate and in the same manner as they did before the much-debated 2005 bankruptcy law reform, a trend critics say proves the reform was a failure.

Congress wrangled for eight years before passing a reform act aimed at curbing abuse and ending an alarming rise in bankruptcy filings. With the economy in tatters and personal fortunes often in even worse shape these days, the bankruptcy law is beginning to undergo scrutiny again.

For now, Congress is focused on efforts to stem home foreclosures by altering the law so that bankruptcy court judges will be allowed to modify certain mortgages to help people keep their homes. But once that's settled, attention will turn to the 2005 bankruptcy reform.
"There is continuing concern about the bankruptcy-reform bill and what its effects have been," says Sen. Sheldon Whitehouse, D-R.I., who leads the Senate Judiciary subcommittee that oversees bankruptcy law. "We are looking at a number of things that we can do to address the problems."

GM Bondholders Say Debt-Swap Plan Risks Bankruptcy

Copied and Pasted by: Jeffrey Kam

March 23 (Bloomberg) -- Bondholder representatives said General Motors Corp.’s formula to swap debt for equity is likely to lead to “a bankruptcy that would have dire consequences,” and the advisers urged agreement on an alternative.

“We believe that, unless the framework we suggested is utilized, the restructuring currently contemplated will not achieve the required level of acceptance to succeed on an out- of-court basis,” the advisers wrote in a letter yesterday to Treasury Secretary Timothy Geithner and representatives of President Barack Obama’s auto task force.

The advisers said they are “disappointed” proposals they offered March 5, which the letter doesn’t describe, received no response from the task force or GM. The automaker is trying to persuade bondholders to swap debt valued at $27.5 billion for $9.2 billion and equity in the automaker

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Thursday, March 19, 2009

No more Bailout

Copy and pasted by Po-cheng Huang

Bankruptcy America

By Po-cheng Huang

BearStern, Lehman, Trump Entertainment, Delphi, even 250 years old company like Waterford Wedgwood filed for bankruptcy protection in this economic turmoil. The U.S. government had injected trillions of dollars into the economy, bailing out financial giants like AIG and Citigroup with money from the tax payers and issuing government debt to foreign governments, individual investors, and the Federal Reserve. With the foreign governments now show reluctances to purchase more U.S. debts, the Federal Reserve announced that it will spend another trillion dollars on buying 350 billion dollar Treasury bill and the remaining for Mortgage back securities. Now it raises the question, does the Fed have unlimited amount of money? When will the U.S. be able to pull itself out of debt? Who’s going to be carrying those debts? Or will the United States of America also ended up declaring bankruptcy? These are question that policy makers got to think about before printing endless amount of money, raising tremendous amount of debt and leave that to the next generation to help the failing financial institutions to survive while moves and actions taken to help the failing companies directly contradict to the free market belief that American have believed since 300 years ago.


Wednesday, March 18, 2009

For many organizations or companies, filing bankruptcy can be the last shot at any chance of financial life. However, even if the company who files for bankruptcy comes out of debt successfully, bankruptcy may still haunt them for years. Once a company has filed for bankruptcy, their reputation may suffer, and they could possibly lose business due to this. Six Flag's executives are spiraling towards bankruptcy, but they are worried what effect that would have on their sales. Experts expect customers to lose confidence in Six Flag's performance if they filed bankruptcy, especially because it involves high risk activities such as high speed roller coasters. This aspect of bankruptcy is yet another thing to think about before considering it.

Posted by Matt Smith

Bankruptcy and Credit Score

By: Jeffrey Kam

Bankruptcy should be the last option that you should consider when your financial situation is doing poorly. If your situation has been doing poorly for a long period of time, declaring bankruptcy may not have any larger effect on you. Filing bankruptcy will appear on your credit score for 10 years; however the creditors will know that you will be not be able to do it again for 7 years. One positive thing that bankruptcy will help you is to stop all the letters and phone calls from creditors and collectors. The credit score will depend on which bankruptcy you choose to file, Chapter 13, or Chapter 7.

Chapter 13 bankruptcy allows you reorganize your financial goal and “work out” a plan to pay off the debt in small amount in specific time frames. This is design for people that have short term financial issue, such as job lost. Although this will show negative affects in your credit score, but this shows you are willing to pay your debt rather than discharging them, you will receive new credit within a year.

Chapter 7 bankruptcy will draw marks all over your credit scores. You must pay all the debt you own and create a barrier between you and new loans for 2 or more years.

Here are some tips that will regain your credit score: avoiding previous mistake that you have done with lead you to bankruptcy. Make a new credit account, this is a new opportunity for you to have a better credit score, just remember to make timely payment, maintain low credit and payoff remaining balance each month.