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How many bankruptcies this week?

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How many bankruptcies this week?

Old 10-09-05, 10:10 PM
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How many bankruptcies this week?

With the rules for bankruptcy changing on Oct 17, do you think there will be a lot of bankruptcies this week?

Delphi just did it, Delta did it a while back, but could this be a big week for bankruptcies?

What do you think?
Old 10-09-05, 10:11 PM
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The rules aren't changing for corporate bankruptcies, just for personal bankruptcies.

I can tell you that the bankruptcy lawyers I know are going to be very busy this week.
Old 10-09-05, 10:18 PM
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My impression is that they WERE changing for corporate - at least based on all the news stories I've been reading.

Does the media just not understand, or are there changes for corporations too?
Old 10-09-05, 10:22 PM
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Delta:

"We think that any financial benefits from these transactions are not likely to materially improve the company's financial condition," the research firm said. "We still see a bankruptcy filing before Oct. 17 as likely."

Delphi:

Miller, a restructuring expert who was hired in July, had threatened to take the company into bankruptcy if he failed to reach a restructuring agreement with GM and its largest union, the United Auto Workers. Miller set a deadline of Oct. 17, when U.S. bankruptcy laws are scheduled to change.
Old 10-09-05, 10:23 PM
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AFAIK, all the changes had to do with personal bk's. Or at least I haven't heard of any bankruptcy law changes for corporations.

Edit: There are a few corporate changes. But nothing major. Most of the law was based on personal bankruptcies.

Last edited by WildcatLH; 10-09-05 at 10:26 PM.
Old 10-09-05, 10:28 PM
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More from Delphi:

In a report published Monday by The Wall Street Journal, chairman and chief executive Steve Miller said he continues to mull the option of seeking Chapter 11 protection by Oct. 17, when U.S. bankruptcy laws toughen on corporations.


If you're right (and I'm not saying you are not), why the emphasis for corporations in the news?
Old 10-09-05, 10:32 PM
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Here's what I've had bookmarked at work about the changes in the law: http://www.cch.com/bankruptcy/Bankruptcy_04-21.pdf

The changes are there, but not major for corporations. Alot of the corporate changes are spillover from the personal changes. But there's a possibilty I'm wrong, since none of the companies I represent are anywhere near a filing and I haven't had to pay much attention.
Old 10-10-05, 01:35 AM
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Before Oct 17: you can have virtually all your debts excused (not tax liabilities, etc.)

After Oct 17, only some of your debts will be forgiven, and court-ordered repayment schedules in accordance with your income will be set up.

So yeah, lots and lots and lots and lots and lots of people will be filing in the coming week.

Last edited by marty888; 10-10-05 at 01:38 AM.
Old 10-10-05, 02:36 AM
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If you owe a shitload of money, you're more than likely going to be just fine when you file. If anyone knows different, let me know.

It's those people who file for Chapter 7 for like $3,000 or $8,000, and yet clear quite a large sum every single month which could go to repaying the debt. The "Means Test" says you have to be able to pay back 25% of your debt in 5 years. You have to clear between $100-$167 a month in order to make the payments. So, the less you file for, the less likely you will qualify for Chapter 7. If you have $50,000 in debt, and you only make $15,000 a year, that would mean you would have to pay $208 a month. Now, I don't know that many people who can clear $208 a month making $15,000 a year.

It seems like there is still the "abuse" factor, but you must have valid documentation you can't repay your debt, and your income says as much.

But I wouldn't be shocked if businesses get a better deal.

Last edited by DVD Polizei; 10-10-05 at 02:42 AM.
Old 10-10-05, 03:32 PM
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About time. My wife has a friend that she has known for years that has been using bankrupcy as a tool for 'money management'. I hope she is in a part of her regular bankrupcy cycle where she can not file in time and is forced to pay back what she owes. This friend has filed bankrupcy 4 times that I know of. I also want to know why the stupid credit companies keep giving her credit?
Old 10-10-05, 03:42 PM
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Originally Posted by DVD Polizei
If you owe a shitload of money, you're more than likely going to be just fine when you file. If anyone knows different, let me know.

It's those people who file for Chapter 7 for like $3,000 or $8,000, and yet clear quite a large sum every single month which could go to repaying the debt. The "Means Test" says you have to be able to pay back 25% of your debt in 5 years. You have to clear between $100-$167 a month in order to make the payments. So, the less you file for, the less likely you will qualify for Chapter 7. If you have $50,000 in debt, and you only make $15,000 a year, that would mean you would have to pay $208 a month. Now, I don't know that many people who can clear $208 a month making $15,000 a year.

It seems like there is still the "abuse" factor, but you must have valid documentation you can't repay your debt, and your income says as much.

But I wouldn't be shocked if businesses get a better deal.

but a lot of times businesses negotiate with their creditors and even get new loans before they go chapter 11. You can't compare the two.
Old 10-10-05, 03:53 PM
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Originally Posted by 4KRG
AboThis friend has filed bankrupcy 4 times that I know of. I also want to know why the stupid credit companies keep giving her credit?
Sounds like they deserve what they get.

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