Too Poor To File For Bankruptcy?

In the past, people who were struggling financially had the option of filing for bankruptcy under Chapter 7. While this option still exists, the increased costs of filing for bankruptcy has effectively removed this option from truly poor people, a new study has found.

A New Study

A study by The Federal Reserve Bank of New York (“Insolvency after the 2005 Bankruptcy Reform”, by economists Stefania Albanesi of the New York Fed and Jaromir Nosal of Columbia University) has found that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, originally passed to keep people out of bankruptcy court, has raised the cost of filing for bankruptcy significantly. This has prevented the people who need it most from filing.

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GM Won’t Face Lawsuits Because of 2009 Bankruptcy

One unexpected result of the car manufacturer’s 2009 bankruptcy is that now they cannot be held responsible for the ignition malfunction in cars recalled in 2014. The company faced over 130 lawsuits for accidents and vehicle loss. A federal bankruptcy court judge recently ruled in favor of GM, who said that the defects took place under “Old GM” and not “New GM.”

When the company restructured after the 2009 bankruptcy proceeding, the bankruptcy judge stated that all liabilities from “Old GM” would be discharged and the “New GM” would no longer be responsible for them.

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Bankruptcy Fraud in Florida

Though filing bankruptcy comes with fear attached on many occasions after the fear often comes a sigh of relief.  Although a vast majority of bankruptcy cases are lawful and done for legitimate reasons, there are some cases that involve fraud.  Bankruptcy fraud is often committed in tandem with other financial crimes such as filing in multiple states or stealing credit card numbers. It is, comparatively, a simple crime to commit.

Punishment for bankruptcy fraud is severe, and since all of the paperwork required contains exhaustive information regarding the types of fraud and the penalties for them, it is very difficult if not impossible to plead ignorance. Once a bankruptcy trustee suspects a client of fraud, that party is free to compel testimony from anyone at all.

Hiding or Concealing Assets

If you are caught transferring ownership of property of any kind to family or friends in an effort to hide assets, you could receive jail time. You must be accountable for all of them, and you can leave nothing out.

When a bankruptcy is filed, investigators search every asset you posses or will possess, and a full explanation is demanded from you. Hiding anything of any value in order to regain possession of it after the bankruptcy is finalized is illegal.

Credit Card Fraud

If you were thinking of getting a credit card just before you declare bankruptcy and fill it with purchases, believing it would be paid off with the bankruptcy, think again! Once bankruptcy is filed, all of your spending records are taken into account, and such irresponsible spending can lead to your request to be denied.

Alternatively, the charges you incur could be considered non dis-chargeable, which would mean that you would still have to pay the debt. Once bankruptcy proceedings are over, the bankruptcy trustees will tell you for what you may or may not spend money, and how bills will be paid.

Intentionally Filing Incomplete or Incorrect Forms

It is of the utmost importance that your forms be filled out honestly, thoroughly, and correctly. It is very important to have a good bankruptcy lawyer help you fill out forms, answer your questions, and tell you what financial information needs to be included in your documentation.

If there is a mistake on the form, it quickly becomes a red flag and an issue. There is also the possibility that you won’t be able to prove that the mistake was genuine. Giving false answers on any bankruptcy form could get you prosecuted for bankruptcy fraud so run everything by a bankruptcy lawyer before submission.

Filing Bankruptcy in Multiple States with False or Real Information

Whether you use genuine or false information, filing bankruptcy in multiple states is illegal and constitutes bankruptcy fraud. This crime carries a sentence of up to five years in prison, a heavy fine, or both. These multiple filings can slow down the court’s handling of a bankruptcy and the discovery of assets the debtor may be hiding. If you have ties to more than one state, consult your lawyer on the correct procedure to take.

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New Obama Executive Order Regarding Student Loan Discharge

Though traditionally, student loans have not been dis-chargeable in bankruptcy, that may soon change. On March 10th, 2015, President Barack Obama signed an executive action that may make it easier to erase student debt for those who file bankruptcy.

New Ease in Eliminating Student Debt

Historically, student loans have only been dischargeable by those who are under extreme hardship, which is difficult to prove in bankruptcy courts. The proposed legislation by the President would make it easier for more people to eliminate their student debt. It is currently unclear how many debtors could be affected and what the new standards would be.

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David Cassidy Bankruptcy Case

It looks as if one time heartthrob David Cassidy has fallen on hard times. The 70s television star who has sold over 30 million records, has filed for bankruptcy in a federal court in Fort Lauderdale. He states that he has nearly $500,000 worth of debt that he is unable to pay back.

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Radio Shack Bankruptcy Case

After 94 years, what was once a staple of radio and stereo aficionados has filed for bankruptcy. Though they had managed to stay in business for many years more than expected, the company will be doing a massive restructuring and closing many stores.

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Companies Bankruptcy Leads to Student Exposure, Possible Identity Theft

Usually, when companies go bankrupt and are broken up in order to sell, the transfer of private information is done in a safe and private way. But when ConnectEDU Inc., an education-tech company, was broken up in order to sell, the company went against their own privacy policy, exposing millions of student records for students ranging from middle school to college ages. This policy stipulated that the owners of said private information could have their information deleted before any sale.

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LDK Files Bankruptcy

Chinese solar cell maker LDK Solar Co. defaulted on its bonds last year and filed bankruptcy in the United States in an effort to continue restructuring efforts already in motion in The Cayman Islands and Hong Kong.

Based in Xinyu, China, LDK filed Chapter 15 bankruptcy protection, citing $1.13 billion in unpaid debt and another $510 million in assets at the end of May, 2014. Under Chapter 15, foreign companies are able to fend off collections efforts by U.S. creditors and distribute payments in the States. Certain U.S. affiliates including LDK Solar Systems, Inc. have filed for protection under Chapter 11.

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Apparel Retailer Delia’s Files for Bankruptcy

Struggling New York-based retailer Delia’s – a clothing chain which caters to teen girls, has filed Chapter 11 bankruptcy and is currently liquidating all merchandise after attempts to find a buyer failed.

Founded in 1993, Delia’s has a retail presence of 92 stores covering 29 states. The company engages in sales via retail establishments and via the World Wide Web. It describes itself as a “girls only” brand and caters to a target demographic of females, aged 12 to 18.

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