Friday, August 27, 2010

Bankruptcy Filings up, Bankruptcy Filings down: How can we know what the trends really are?

Overall we know that the majority of the country is experiencing the highest numbers in personal bankruptcy in quite some time. But some anomalies in the statistics are throwing economists, personal bankruptcy lawyers, and consumers for a bit of a loop.

According to the Rochester Business Journal, the bankruptcy stats in the area of western New York state are dropping -- well below national averages, and rather quickly.

Conversely, personal bankruptcy rates in in nearby Maryland are growing at alarming rates -- new data suggests perhaps as much as 20 percent higher than the national average. So why the stark difference? After all, Maryland and New York are in the same part of the United States, and the idea that western New York would be on the upside of this equation is somewhat counterintuitive.

New information reveals that the New York downward bankruptcy trend decreasing may likely have to do with the fact that the area did not experience anywhere near the devastation that the rest of the nation did during the housing bust. The major reasons for bankruptcy here are credit card and medical debt -- still serious, but statistically not comparable to bankruptcy caused by subprime housing issues and other large asset based-bankruptcy.

So why then is bankruptcy more prevalent in Maryland? While it's a stone's throw from New York, the likely answer is the obvious one: Maryland was harder hit by the subprime crisis than western New York. In addition, those who chose to file for personal bankruptcy opted for Chapter 7 more often than Chapter 13, making it clear that these were consumers in far over their heads. The Baltimore Sun suggests that another issue may be that consumers in Maryland may have abused their credit more than the average consumer in other parts of the country, but this speculation may not wash when all the cards are on the table.

Tuesday, August 24, 2010

Blockbuster not such a Blockbuster anymore

Remember the days when the whole family would pile into the car to drive down to Blockbuster and pick up a family-friendly movie to watch after TGIF on ABC? Ah, the golden age of Blockbuster -- in deed the golden age of entertainment before the Intenet -- certainly before YouTube.

As with all things tangible that we can drive to, with the exception of buying clothing, food, and gasoline, Blockbuster is rumored to be the next giant to fall into bankruptcy. It doesn't come as a surprise; even with the advent of their online availability, Blockbuster was simply piggybacking on the NetFlix idea, which caught on like the British Invasion... and so the Internet option for Blockbuster was overlooked for most move renters.

The Blockbuster bankruptcy is not a sure thing -- the company is doing everything it can to avoid chapter 11, including meeting with Hollywood bigwigs and making stronger efforts to compete with RedBox. But all that said, most financial experts agree that a bankruptcy filing or at least some pre-bankruptcy steps will be taken as early as the middle of September 2010. Right now Blockbuster mouthpieces are not saying "bankruptcy" outright, but what they are saying is something along the lines ofd "financial restructuring -- essentially code for bankruptcy with a plan for growth during and after. So what's next for blockbuster pre, during and post-bankruptcy? Likely rebranding efforts to compete with RedBox in a similar fashion with kiosks in familiar places like Walmart, etc. as well as an aggressive knock on Hollywood's door to secure some sort of proprietary partnership that competitors like RedBox and NetFlix won't be privy to.

They may just pull it off. Just as Tom McAvity and other knowledgeable bankruptcy attorneys will tell you, bankruptcy can be the best way to turn a financial future around, and in the case of Blockbuster, it may give them just the time they need to get some actionable marketing steps going to keep from going under.

Saturday, August 21, 2010

Small Business Owners :: Which Bankruptcy Chapter is for You?

With the unreal economic downturn the US has experienced since the major subprime crisis of 2007, it's really no surprise at all that small business like sole proprietors and partnerships have suffered tremendously. But what these mom and pop shops don't understand in the face of financial crisis is which chapter of bankruptcy is appropriate for their unique circumstances.

While it is true that proper business planning ahead of time can help small business owners from losing personal assets, most sole proprietors and other types of "micro-businesses" will still have to worry about personal assets becoming a part of a chapter 11 filing. So... would it make more sense to file chapter 7 or 13? Maybe so.

In many cases, a small business owner may be in such financial distress that they would have to file for both personal and business bankruptcies. For those who are sole proprietors, a personal bankruptcy can resolve both issues in many cases -- and in most of these cases, it can resolve the issues more quickly and more cheaply.

There are of course many variables: assets, estate plans, wills, inventory, insurance, and so on. This makes each small business bankruptcy turned personal bankruptcy different, and in some circumstances, moms and pops may have to file chapter 11 and chapter 13 or chapter 7.

The only way to know for sure is to get a consultation with a local bankruptcy attorney who can look at all of your financials and lead you down the right path. After all, making an educated decision armed with the knowledge of a lawyer could save your business or your personal assets. So don't go it alone; make sure you have proper representation that can make the most of your bankruptcy filing.

Tuesday, August 17, 2010

Chrysler Bankruptcy :: Trends in Corporate Bankruptcy up or down?

If you listened to the news several weeks ago, you probably heard that General Motors had paid off all that had been loaned to them by the federal government. Unfortunately for Chrysler, they have not share the same fortunate fate... not that it's all rainbows and unicorns at GM, by any means.

According to the Wall Street Journal's August 13 article about the Chrysler bankruptcy, what Chrysler owes just to the bankruptcy attorneys are in the neighborhood of $85 million... quite a sum for Chapter 11 bankruptcy help.

With regard to the primary bankruptcy law firm handling the Chrysler case, Eric Morath of the WSJ writes, "Jones Day charged an average of $500 per hour for the work done during the first four months of this year."

But Jones Day was not the only firm working on the Chrysler chapter 11 bankruptcy -- as one can imagine, a bankruptcy of this magnitude requires droved of law teams and their respective staff members.

Morath adds, "Nortel Networks, a company about a quarter the size of Chrysler when it filed for Chapter 11 in January 2009, has paid its attorneys and advisers $76 million in fees through the first 18 months of the case, according to Am Law Daily."

So it seems that while Chrysler tries to get out of the woods with their bankruptcy, the proceedings may be more than just a minor financial blow.

So the question remains: with some larger companies trudging up the bankruptcy hill with some level of success, others have larger mountains to climb. No one can really say with any level of accuracy what the real trends in corporate bankruptcy will look like over the next 12 to 24 months... at least.

Saturday, August 14, 2010

Is Celebrity Bankruptcy a Passing Trend or Reflection of Where We All Are?

Khloe Kardashian. Michael Vick. Donald Trump. Teresa Giudice.

These are just a few of the names of celebrities who have either filed for bankruptcy or who are facing financial difficulty. It seems as though Bankruptcy is more a trend for everyone, not just those who are "everyday folks."

Bankruptcy is a helpful tool for anyone -- anyone -- who needs debt relief, not just those of us who have experienced what could be perceived as minor difficulties.

With an entire nation under financial duress, Tom McAvity can tell you that debt relief and filing for bankruptcy is a good option for many people, famous or not.

If you need financial help and debt relief, contact Tom McAvity for help with bankruptcy in Vancouver, Washington, Portland or Salem, Oregon. Just call 503-860-6868.

Wednesday, August 11, 2010

Payday Loan Debt and Bankruptcy

Most people know that payday loans can be a very slippery slope, yet many may not have any other choices -- it's a matter of pick your poison. For this reason, when people get behind or have put their cars or other assets up as collateral, a bad financial situation can become exponentially worse.

If you've gotten in over your head with payday loans or other high interest rate loans, you may have to file bankruptcy, and that may be the best decision you make for your financial future.

If you have decided that the kind of debt relief that Chapter 7 or Chapter 13 bankruptcy can offer you might be your best bet, you'll need to talk with a knowledgable bankruptcy attorney like Tom McAvity who can help you sort things out.

It may be that bankruptcy is not the best fit for you -- it could be that there are better debt relief options for your circumstances. In any case, getting the advice of a financial professional will be your best bet.

Saturday, August 7, 2010

Is technology having an impact on celebrity bankruptcy?

In recent news, PHILO, an application to watch "buzzworthy tv" for the new iPhone, announced that they would donate a small percentage of their proceeds to a new "charity" to help save New Jersey Housewife Teresa Giudice and her husband from losing so much during their bankruptcy proceedings.

Will this type of technology soon be the new way to sponsor celebrities in financial trouble? If you think about it, it's sort of the way to have a celebrity spokesperson during an economic downturn. What's more, real and everyday people can relate to bankruptcy, because so many millions are experiencing it. What if an honorable organization were to put together a fund to help Michael Vick raise funds? Would this lend credibility to his new image of trying to be a better person? How about Chanel pulling some strings to help Khloe Kardashian with her nearly $20,000 debt to the IRS? Would it boost Chanel sales, making it a smart business and marketing move on their part?

Interesting food for thought in the world of celebrity bankruptcy!

Tuesday, August 3, 2010

Women and Bankruptcy :: The Numbers are Rising

New statistics are showing that women in particular are struggling with bankruptcy at historic rates. According to The Independent of Britain, women are filing at a rate 28 percent higher than just one year ago. Is there any reason for this disparity between the sexes, or is it just a coincidence?

The issue of the day for women seems to be credit card debt. Many are getting in over their heads, paying the minimum monthly payments, or stopping paying all together when they see that the high interest rates are keeping their balance from dropping at all. Very young women, such as those in college or recently graduated (or college age) find themselves in serious debt.

The Independent notes that women between the ages of 25 to 44 represent approximately 66 percent of all bankruptcies for women. Some experts suggest that the reason for such credit card debt in this age group may have something to do with "role models" who live lavish lifestyles, giving off a high profile image with which no price tag is attached.

Unfortunately credit card companies are not likely to help a young consumer -- in fact, within one or two late payments, APRs can rise to tremendous rates -- 29.99 percent and higher, making it near impossible to ever wipe out credit card debt without some sort of debt relief.

Those who need help from a Vancouver, Washington bankruptcy attorney can call Tom McAvity at 360.828.0110 for a free consultation to begin on the road to financial recovery.