Detroit Files for Bankruptcy

Although the economy seems to be improving, Detroit unfortunately has been under financial stress for decades and has lost tax revenue due to a dwindling population.  The Motor City filed for bankruptcy today in order to restructure its debts and obligations.  The goal for Detroit is to stabilize its finances in order to provide basic governmental services.  Municipalities file under Chapter 9 of the Bankruptcy Code.

Advertisements

Law School Graduate Granted Discharge of Student Loans

The 9th Circuit recently affirmed a Bankruptcy Court judge’s decision to allow former law school student Michael Hedlund discharge $53,000 in student loans through bankruptcy.  Will this set a precedence on future bankruptcy filings?  Student loan default rates are rising at an accelerated rate.

Cancer patients more likely to file for bankruptcy

Despite new changes in health care law, cancer patients are still much more likely to file for bankruptcy.  The cost of treating cancer easily tops six-figures and compounding the problem is the fact that many receiving treatment are physically unable to work.  Even if an individual has insurance, the insurance company may not cover all life-saving procedures or tests.  Bankruptcy is an option to completely discharge medical debts that are often unavoidable, despite a patient’s best intentions in paying off the bills.

Judicial Liens on Home – Can They be Discharged Through Bankruptcy?

For the most part, yes.  Many people who file for bankruptcy have credit card or other monetary judgments against them.  This can occur if lawsuits filed by creditors go ignored by the credit card holder.  Eventually, the credit card company or whoever owns the debt (collection agencies, for example) will try to use the judgment to place a judicial lien on your home.  

Getting rid of the lien at this point takes some work for your bankruptcy attorney.  If you file for bankruptcy after a judicial lien is placed on your home, the equity in your home must be exempt.  For most people who file for bankruptcy, this usually is not an issue because there is no equity in the home anyway.  

The bankruptcy attorney will then file a motion to avoid the judicial lien with the bankruptcy court.  Once the bankruptcy court judge signs off an order, the order can then be given to the clerk of the courts where the judicial liens on the home have taken place in order to lift them.

Hostess to Liquidate

Hostess, maker of famed snacks such as Twinkies and Ho-Hos, has moved on to liquidate the company’s assets in order to pay back its creditors.  Much like a personal Chapter 7 bankruptcy, liquidation can involve the process of selling assets such as warehouses, factories and proprietary holdings, however it is still yet to be seen whether there will be a buyer.  Hostess had already attempted to reorganize its debts in prior bankruptcy filings, but was unable to recover.

Fed to Buy $40 billion PER Month in Mortgage Bonds

The Fed announced it will purchased $40 billion per month in mortgage bonds.  It did not say for exactly how long.  What this means is that there will most likely be a shift in how the banks will treat mortgages – both in offering and modifying existing ones.  Theoretically, it will make home purchasing easier, and allow for more home mortgage modifications to help those who are struggling keeping up with their payments.  Let’s cross our fingers.

Jose Canseco Files for Bankruptcy

Further proof that the need for bankruptcy does not discriminate, former baseball Rookie of the Year and power slugger Jose Canseco has filed for Chapter 7 bankruptcy.  Many sports stars end up filing for bankruptcy because they are not able to maintain a lifestyle after the limelight has dimmed.  Bankruptcy is a tool for anyone who needs a fresh start and to wipe away their debts such as credit cards, medical bills and many other forms of liabilities.