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Especially considering the recent economic crisis and weak housing market, it is more important than ever to keep abreast of current bankruptcy laws, bankruptcy rates, and bankruptcy cases. This Missouri and Illinois bankruptcy news section will help those considering bankruptcy learn more about the most current and relevant happenings in the world of bankruptcy law. Taken from trusted sources such as the Chicago Tribune, Associated Press, and St. Louis Business Jounral, these news briefs are meant to educate, inform, and enlighten.

• Ohio Man Finds His Own Way to Avoid Foreclosure
  A man from Ohio says that he bulldozed his $350,000 home in order to prevent a bank from foreclosing on it.
• Kansas City Foreclosure Rate Decreases, Still High for the Year
  According to a February 11 report from RealtyTrac Inc., home foreclosure activity in the 15-county Kansas City area saw a decrease of 13.3 percent from December to January, but were still 66.9 percent higher than January 2009.
• Giants Player Plaxico Burress Faces Foreclosure
  Plaxico Burress, the embattled former wide receiver for the New York Giants, could be without a Florida home to return to once he emerges from prison.
  
  On January 22, the imprisoned Super Bowl hero and his wife, Tiffany, were hit with a $3.3 million foreclosure suit from Deutsche Bank National Trust Co., as a trustee for a mortgage-backed securities fund, according to Broward County Circuit Court records.
• Tribune Co. Gets Extra Time for Bankruptcy Plan
  On February 18, Tribune Co. was granted an extension on its exclusive right to file a reorganization plan in its Chapter 11 case by a U.S. Bankruptcy Court judge in Delaware. The extension was until March 31.
• Former InBank CEO Files For Personal Chapter 7 Bankruptcy
  An infamous Chicago former bank CEO Cynthia Grazian has filed for Chapter 7 liquidation bankruptcy just a year after her doomed bank failed.
• Missouri House Struggles To Save President Casino From Ruin
  President Casino, which has been struggling with bankruptcy and money problem, is the center of a new law that could prevent the major source of employment from shutting its doors.
• Kansas City Star: Should Underwater Homeowners Walk Away From Mortgage
  Strategic default of loans is becoming a more popular option for homeowners with underwater mortgages in Illinois and Missouri. What is the thought process behind walking away from your house - and a mortgage?
• Chicago Workers Protest After Duraco Files Chapter 7 Bankruptcy
  A manufacturer who filed for Chapter 11 bankruptcy in 2008 has now filed for Chapter 7 bankruptcy and closed its Chicago plant. Now workers are protesting for money they earned over the last two years.
• Movie Gallery Closes Stores in Missouri During Bankruptcy
  As a part of the national chain’s bankruptcy, Movie Gallery stores in Jefferson City and Fulton and one store in Columbia will be closed. In all, the company plans to close more than 2,000 video rental stores across the U.S.
• Missouri Lawmakers Discuss Bill for Debt and Injured Workers
  On February 15, lawmakers in the Missouri House considered a bill that would stave off bankruptcy in a state fund for injured workers. The Second Injury Fund, which pays claims for workers with pre-existing injuries who are injured a second time on the job, has been in dire shape since 2005, when a cap was instituted on its revenues.
• Bankruptcy Rates Skyrocket 20 Percent In Missouri Ozarks
  Just as with the rest of Missouri and the rest of the nation, families and businesses in the Ozarks are recording a record number of bankruptcies in 2009.
• Host of Winter Olympics Ski Events Postpones Foreclosure
  The owners of the Whistler-Blackcombe ski resort, site of many of the events of the 2010 Winter Olympics, have received a reprieve. Lenders had threatened to foreclosure on the resort on February 19 due to the owners being hundreds of millions of dollars behind in their payments.
• Electric Scooter Maker Vectrix Corp Relaunches after Chapter 11
  Vectrix Corp., a company that manufactures electric scooters, has been relaunched under new ownership after entering Chapter 11 bankruptcy in the fall of 2009. The new company, which is incorporated in Delaware, has made New Bedford, Massachusetts its headquarters in the U.S. and has leased space in the New Bedford Business Park that was occupied by the former incarnation of Vectrix, as well, according to the park’s executive director Thomas Davis.
• FairPoint Communication Finalizes Bankruptcy Plans
  The Associated Press says that after delaying for two months, FairPoint Communications Inc. has finally filed its plans for reorganization under bankruptcy in U.S. Bankruptcy Court in New York on February 8.
• Movie Gallery Finds Itself in Bankruptcy, Closing More Stores
  Movie Gallery, the second-largest video store chain in the U.S., has retreated back into bankruptcy proceedings and plans to close 805 more stores. The announcement was not much of an event at Hollywood Video in Boise, Idaho, which has been closing since January 20. Movies at that store have been marked all the way down to 70 percent off and likely will drop to 80 percent. The store is closing for good on February 14, according to a store employee.
• Two Downtown St. Louis Properties Sell Due to Foreclosure
  Two former Pyramid Cos. properties in downtown St. Louis were sold on February 3 due to foreclosure. The sole bidder for the One City Centre office tower was SCR Investments, led by Environmental Operations Inc. chief executive Stacy Hastie, for $12.7 million. Hastie as an individual was the lone bidder for the Arcade building for $9 million.
• Obama Calls for Change in Loan Modification Program
  President Barack Obama’s administration recently overhauled its struggling foreclosure avoidance program, saying that it would require homeowners seeking to ease their mortgage terms to document their financial situation before being granted a trial modification.
• Car Dependency Linked to High Foreclosure Rates
  According to a recent report by the Natural Resources Defense Council (NRDC), homeowners in car-dependent areas without transit options have a higher risk of foreclosure. The NRDC has called for mortgage underwriting standards to start taking so-called “location-efficiency” into account.
• Reader's Digest Sells CompassLearning in Bankruptcy
  According to Reader’s Digest Association Inc., the sale of its CompassLearning unity has received the approval of a bankruptcy judge and the publisher has reached an agreement with a pension group on claims that it may have forced the closing of its U.K. business.
• Foreclosures Decrease in Polk County
  In 2009, the home foreclosure rate in Polk County saw an improvement over figures from 2008, according to information from the office of the Polk County Recorder. In 2008, one out of every 86 homes was foreclosed upon, but in 2009, one out of every 91 was foreclosed upon.
• Illinois Auto Dealers Fight GM & Chrysler Bankruptcy Cutbacks
  Over 100 car dealerships in Illinois have appealed their termination by General Motors following the car company's summer bankruptcy.
• Muzak's Bankruptcy Plan Approved
  According to a January 12 statement from music and entertainment company Muzak Holdings LLC, the company’s bankruptcy reorganization plan received the approval of a U.S. judge, paving the way for the company to emerge from bankruptcy later in January.
• New Study: Women More Often Victims Of Predatory Loans
  Between 2005 and 2008, thousands of people became victims of predatory lending and bad mortgages. Now researchers are finding that women and minorities were the prime targets of subprime mortgages and who now face bankruptcy and foreclosure.
• St. Louis Area Business Bankruptcies Skyrocket In 2009
  The fourth quarter of 2009 was the worst since the beginning of the recession when it comes to St. Louis business bankruptcies. Almost 400 area businesses declared bankruptcy in 2009.
• One Missouri Woman’s Story Of Chapter 7 Bankruptcy
  Spending a few hundred dollars more than you make a month could be enough to sink you into serious credit card debt. Read the story of one woman who decided that Chapter 7 bankruptcy was the best choice for her family.
• Japan Airlines to File Bankruptcy Soon
  Japan Airlines, the largest air carrier in Asia, is prepared to file for bankruptcy protection as early as January 19, according to media reports out of Japan.
• Yellow Pages Publisher Makes Final Push to Emerge from Bankruptcy
  Yellow pages publisher R.H. Donnelly has cleared the final obstacle on its path to emerge from bankruptcy by winning court approval for its reorganization plan. On January 12, the plan received the approval of U.S. Bankruptcy Judge Kevin Gross at a hearing in Delaware. The plan also has the overwhelming support of creditors.
• Several Loan Modification Scammers Indicted in San Diego
  A group of four people, including a convicted felon and two real estate brokers, has been indicted on charges of running an investment scam preying on Filipinos in San Diego, California. The group, which initially was investigated by The San Diego Union-Tribune in March 2009, is faced with more than 54 charges, including foreclosure consultant fraud, grand theft, and securities fraud. The group allegedly persuaded families to transfer ownership of their homes to two trusts, with the promise that the group would help them modify and lower their mortgages.
• St. Louis Business' Bankruptcy Filings See Big Increase
  According to a recent study, the number of businesses in the St. Louis area that have filed for bankruptcy saw an increase of 19 percent in 2009. In a report released by Hoffman Clark, an accounting firm out of Clayton, Missouri, on January 11, 398 St. Louis businesses filed for bankruptcy in the year ending December 31. That number is an increase from 334 in 2008 and 176 in 2007.
• A Sinkhole In Battlefield, MO – Family Declares Bankruptcy
  Bankruptcy is often the result of an unforeseen problem in your financial life. In the case of the White family, their new home fell into a sink hole - and took their financial security with it. Bankruptcy was their answer.
• Florida Courts Hope to See an End to the Foreclosure Crisis
  The chief judge of the court Pinellas-Pasco court system in Florida is hoping 2010 will bring relief for judges, consumers, and lenders caught in the growing morass of the worst foreclosure crisis in the U.S. According to Pinellas-Pasco Circuit Court Chief Judge J. Thomas McGrady, the caseload is nearly 2,000 foreclosure cases per judge. And with 2009 coming to an end, McGrady says the cases continue to stack up twice as fast as judges can resolve them. The workload for judges handling all kinds of civil cases has nearly tripled because of the rapidly increasing number of foreclosures, which has roughly doubled each year for the past three years or so.
• Brown’s Chicken & Pasta Inc. Files for Chapter 11 Bankruptcy
  A chain of chicken restaurants that made headlines across the U.S. in 1993 when seven employees at one of its stores in suburban Chicago were killed has filed for Chapter 11 bankruptcy protection. On December 29, Brown’s Chicken & Pasta Inc. filed for bankruptcy, two months after the company was ordered by a DuPage County judge to pay more than $800,000 to a former vice president and minority shareholder who filed suit for wrongful termination.
• Tiger Woods' Sponsor to File Chapter 11 Bankruptcy
  TLC Vision Corp., the eye-care service company that sponsors pro golfer Tiger Woods, has filed for Chapter 11 bankruptcy protection in order to restructure its debt. In the documents the company filed in U.S. Bankruptcy Court in Wilmington, Delaware on December 21, the company listed assets and debt of $100 million to $500 million. Affiliates TLC Vision (USA) Corp. and TLC Management Services Inc. also sought bankruptcy protection.
• US Fidelis Headquarters to Be Sold in Foreclosure
  US Fidelis, which had more than 1,000 employees at the beginning of 2009, announced hundreds of layoffs earlier in December and recently said that it had stopped selling extended-service contracts.
• Foxland Harbor Marina Files for Bankruptcy to Prevent Foreclosure
  An entity owning land off Old Hickory Lake in Gallatin, Tennessee planned for a marina has filed for bankruptcy protection in order to stave off foreclosure, according to a spokesman. On the morning of December 28, Foxland Harbor Marina LLC filed for bankruptcy in the U.S. Bankruptcy Court in Nashville in advance of the foreclosure sale that lender American Security Bank & Trust had planned.
• Maker of “Equal” Files Gets Approved for Chapter 11 Bankruptcy
  On December 16, Chicago-based Merisant Worldwide Inc., the manufacturer of the artificial sweetener Equal, announced that a court had approved its reorganization plan under Chapter 11 bankruptcy. The company is predicting that it could emerge from bankruptcy as soon as January 8, nearly a year after the company filed for Chapter 11, citing declining sales, a large load of debt, and the global credit crisis as factors.
• Employee Bonuses Get Approved in Lehman Brothers Bankruptcy
  In November, Lehman, the investment bank liquidating in bankruptcy, asked U.S. Bankruptcy Judge James Peck in New York for permission to pay the bonuses to approximately 230 full-time employees unwinding the contracts. On December 16, the judge sanctioned the payments as bankers, under attack after two years of failures and bailouts, risk more public ire by awarding year-end bonuses, according to a Bloomberg National Poll earlier in December.
• New York Governor Takes Steps to Protect Homeowners from Foreclosure
  On December 15, New York Governor David Paterson signed into law stronger foreclosure regulations for the intended purpose of protecting New Yorkers from losing their homes, such as requiring better notice to homeowners faced with foreclosure and mandating settlement hearings with banks.
• Maryland Women Get Restitution in Foreclosure Rescue Scheme
  As part of a settlement, two mortgage firms based out of Owings Mills, Maryland accused of running a “foreclosure rescue scheme” have agreed to pay $110,000 in cash restitution as part of a settlement that saved the homes of two elderly women in Ellicott City, Maryland, one of whom has died since becoming a victim.
• Chicago Business Bankruptcies Increase By One Third In Third Quarter
  Personal bankruptcies and business bankruptcies continue to surge in the Chicago area despite some other signs that the recession is ending. The number of business bankruptcy filings increased 33 percent over the same quarter last year.
• Attorney General Chris Koster Holds Florida Company Responsible in Mortgage Scam
  According to Missouri Attorney General Chris Koster, he is filing suit against a Florida company that took money from distressed Missouri homeowners, but failed to provide and meaningful mortgage-modification service. Koster is joined by the Federal Trade Commission and the State of Iowa
• Missouri’s TLC Vision Corp. Seeks Bankruptcy Protection
  An laser eye surgery company, TLC Vision, has declared Chapter 11 bankruptcy after a year of poor profits and and financial difficulties. The company said that their reorganization bankruptcy would not affect their sponsorship of Tiger Woods.
• Pace of Home Foreclosures Continues Decline in Missouri and Kansas
  According to the latest market report from RealtyTrac, the pace of home foreclosures in Kansas and Missouri continued to decline during the month of November. According to the report from the California-based institute, foreclosure actions in Kansas saw a decrease of 5.49 percent from October to November. The state reported a total of 878 foreclosure proceedings in November, down 0.03 percent. The report said the state ranks 37th nationwide.
• Illinois Foreclosures Decreasel; Missouri Isn't as Likely
  According to new data from Irvine, California-based RealtyTrac, the number of St. Louis-area properties at some point in the foreclosure process increased 15 percent from October to November and increased 10 percent from November 2008. A total of 2,040 properties, or one out of every 604 homes, were in the foreclosure process in November, according to the report, which was released on December 10.
• How Could The Medical Bankruptcy Fairness Act Help?
  Over half of all bankruptcies involve an unexpected medical emergency - now lawmakers are trying to make it easier for those declaring medical bankruptcies to go through the process and get a fresh start.
• Arcade Building Downtown St. Louis Faces Foreclosure
  According to media reports, a foreclosure sale for the Arcade building in downtown St. Louis has been scheduled for December 31.Deputy Mayor for Development Barbara Geisman called the planned sale “a step toward getting the property back into circulation and get it redeveloped.”
• Shakira Claims Bankruptcy As Part of Her Success
  Colombian pop star Shakira, whose hit single “Hips Don’t Lie” is the most played record in American radio history, says she became a musical sensation and global philanthropist due to her family filing for bankruptcy when she was 8-years-old. At the age of 18, Shakira founded the Barefoot Foundation, a charity to aid poor children in her native Colombia receive an education. She later expanded her reach to become a UNICEF goodwill ambassador. And all of that began when she had the rug pulled out from under her as a child in Barranquilla, Colombia.
• Home Foreclosures Decrease for Missouri and Kansas Overall
  According to the latest market report from RealtyTrac, the pace of home foreclosures in Kansas and Missouri continued to decline during the month of November. According to the report from the California-based institute, foreclosure actions in Kansas saw a decrease of 5.49 percent from October to November. The state reported a total of 878 foreclosure proceedings in November, down 0.03 percent. The report said the state ranks 37th nationwide.
• Foreclosure is Next for Family After Their "Extreme Makeover"
  The team from the popular ABC reality series “Extreme Makeover: Home Edition” might provide worthy families with a new home, but yet another family who appeared on the show has learned that they don’t guarantee you’ll keep that new home forever. Five years ago, the Wofford family of Encinitas, California received their new home. However, they now say that after struggling to pay their bills for two years, they’re now faced with foreclosure. Dr. Brian Wofford, a widower and father of eight, said that many people believe that you get the mortgage when you get the house, but that isn’t the case.
• Popstar Shakira Learned Life Lesson From Family Bankruptcy
  Although Shakira is now a well-paid pop star, growing up in Columbia her family had almost nothing. When they declared bankruptcy, Shakira learned important lessons about money and about giving back.
• Business Bankruptcies In St. Louis Soar In Third Quarter Of 2009
  Just as personal bankruptcies are on the rise in St. Louis and surrounding areas of Missouri, local businesses are also suffering in the face of the recent recession. There was a 19 percent rise in business bankruptcy in St. Louis over the last year.
• Borders May Face Bankruptcy
  Borders could be facing Chapter 7 liquidation soon. The situation with Borders could be seen as similar to Linens ‘N’ Things, another potentially viable company that was sunk by leverage in an overpriced equity deal. They ran into funding problems right as the credit crunch struck. Starved for capital, they were liquidated.
• Credit Card Delinquencies Decrease According to TransUnion
  According to an analysis by TransUnion, one of the three U.S. credit bureaus, credit card delinquencies in the third quarter saw a decrease of six percent in comparison to the previous quarter. The highest rates of delinquency were seen in Nevada (1.98 percent), Florida (1.47 percent), and Arizona (1.35 percent). Those three states are also among the four states with the highest rates of foreclosure. Adding in California, the four states had 43 percent of all foreclosures started in the third quarter, according to the Mortgage Bankers Association.
• Florida Has Highest Rate of Foreclosure
  Florida currently holds the distinction of being the state with the highest rate of foreclosures in the U.S. According to a report in The Palm Beach Post, nearly one out of every five home loans in the state was delinquent in payments by 90 days or more, or was somewhere in the process of foreclosure during the most recent quarter.
• Attempted Block on Charter's Emergence From Bankruptcy
  On November 20, a group of lenders led by JPMorgan Chase & Co., stockholder R2 Investment LDC, and Law Debenture Trust Co. of New York, a trustee for holders of $479 million in bonds, filed motions with the U.S. Bankruptcy Court in the Southern District of New York asking that Judge James Peck hold off on his order approving the bankruptcy plan while they appeal
• More Renters Left With Foreclosed Properties
  A new wave of foreclosures could harm people who may have never even taken out a mortgage: renters. In cities like New York, Chicago, and Los Angeles, where many investors are carrying upside-down mortgages on large rental buildings, some tenants are seeing their homes fall apart along with the financing.
• Good News on Foreclosures in Missouri and Kansas
  According to a report from RealtyTrac, in October Kansas reported a 27 percent decrease in home foreclosures in comparison to September. Though the number is up from the rate in October 2008. With a total of 1,313 foreclosure actions, Kansas ranks 37th overall for October.
• Case on Loan Modifications May Appeal Ruling
  In Minneapolis, Minnesota, a federal judge has dismissed a lawsuit filed by a group of Twin Cities homeowners claiming that charged loan service companies are improperly implementing the federal government’s loan modification program.
  
  The suit, which a public interest group in St. Paul, Minnesota filed this summer, also asked that U.S. District Judge Ann Montgomery issue an injunction preventing bank foreclosures in Minnesota from going forward. In an order issued on November 9, Montgomery said the request had been denied.
  
  Mark Ireland, the attorney who brought the suit by the Foreclosure Relief Law Project, said that the group was reviewing the decision in order to determine if it would file an appeal.
  
  The suit targeted the federal Home Affordable Modification Program, which the Obama administration introduced in the spring in an effort to fight the high number of bank foreclosures in the U.S.
  
  In a separate release on November 10, the Treasury Department released the latest performance numbers on the program, which provides loan servicers with incentives to modify loan terms for struggling borrowers. According to the Treasury Department, the cumulative number of trial modifications provided through the program stood at 650,994 at the end of October, an increase of nearly 34 percent from the 487,081 trial modifications that had been initiated as of September 30.
• Medical Bankruptcy Rate Increases – Even For Those With Health Insurance
  A new study has revealed that 62 percent of people who declare bankruptcy have experienced a recent medical emergency, injury, disease, or other medical problem. Even those with health insurance or Medicaid find themselves in financial trouble from medical issues.
• Missouri Bankruptcy Filings Continue to Soar – 23% This Federal Fiscal Year
  As predicted, the bankruptcy filing numbers for both Missouri and the country as a whole were up this federal fiscal year, with bankruptcy petitions up 23 percent in Missouri. Economists blame the weak economy, credit situation, and housing market for the rise.
• National Foreclosure Rate to Rise Through 2010 Experts Say
  While other aspects of the economy, such as the stock market, are showing signs of recovery and improvement, the foreclosure crisis is not over yet, experts say.
• Herbst's Post-Bankruptcy Layoffs
  According to Herbst general counsel Sean Higgins, the layoffs accounted for less than five percent of the company’s workforce. Upon its filing for Chapter 11 bankruptcy in March, Herbst reported that it employed approximately 5,400 workers, which was down from total of 6,450 employees the company reported to the Securities and Exchange Commission on December 31.
• United Commercial Bank Shut Down by FDIC
  In addition to the $3.2 billion the federal government lost earlier in November due to CIT filing for bankruptcy, another $1.7 billion is lost because of United Commercial Bank’s collapse.
• Fannie Mae Gives People in Foreclosure Chance at Leasing
  On November 5, mortgage giant Fannie Mae announced a plan to allow people losing their homes to foreclosure to lease those properties back for up to a year at market rental rates. The move is the latest in a series of steps by lenders attempting to manage inventories of foreclosed homes on their books in an attempt to keep a wave of properties from slamming a housing market that has shown recent signs of recovery.
• Former Nebraska Football Star Goes Through Bankruptcy After Business Venture
  Former Nebraska Cornhusker star Aaron Taylor may have seen a great deal of success on the field, but the failure of his Cornhusker-themed restaurant in Omaha and his subsequent bankruptcy are hitting him hard. While at Nebraska, Taylor was a part of three national championship teams, was an all-American at center and guard, and won the Outland Trophy as the nation’s best interior lineman in 1997.
• Pork Producer Goes Bankrupt; Some Blame on Swine Flu
  A major pork producer in North Carolina recently filed for bankruptcy, citing complaints from unpaid vendors and declining consumption of pork due to fears over swine flu as reasons.According to a report in Raleigh, N.C.’s News & Observer, Coharie Farms of Clinton, N.C., with a court appearance scheduled for November 10. According to Coharie owner Anne Faircloth, she plans upon liquidating the company and some of the 170 employees will be laid off.
• October Bankruptcy Rates Continue To Soar
  Both corporate and personal bankruptcy rates are still on the rise, and 2009 is becoming the worst year for bankruptcies since the bankruptcy laws changed in 2005.
• St. Louis Woman Charged With Concealing Assets In Chapter 7 Bankruptcy
  One important reason you need a bankruptcy lawyer is to make certain that you follow bankruptcy law. Lying during bankruptcy proceedings can result in fines, perjury charges, and even prison time.
• Foreclosure Filings Up in Missouri in the Third Quarter
  According to a report released on (Thursday before story) by Irvine, California-based RealtyTrac, the number of home foreclosure filings in Missouri saw an increase of 8.3 percent in the third quarter, as the recession bested efforts to aid struggling borrowers with holding on to their homes.
• CIT Group May File for Prepackaged Bankruptcy
  CIT Group Inc., the 101-year-ld commercial lender attempting to avoid collapse, could soon file for a prepackaged bankruptcy after reaching agreements with billionaire Carl Icahn and Goldman Sachs Group Inc.
• Missouri Forgives Debts for Students at Bankrupt Helicopter School
  Under the terms of a settlement between Student Loan Xpress, Missouri, and 11 other states, the company will forgive nearly $113 million in debt for students who obtained loans to attend a now-bankrupt helicopter training school.
• St. Charles Homebuilder Files for Bankruptcy
  St. Charles, Missouri-based homebuilder Whittaker Builders has filed for bankruptcy protection. On October 15, the company, led by President Greg Whittaker, filed for Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Missouri.
• Leader of Waterford Speedbowl Staves Off Foreclosure
  For the second time within the past three years, Terry Eames, the leader of the ownership group of Connecticut’s Waterford Speedbowl, has staved off foreclosure on the racetrack. On (Friday before story), Eames and his group filed for Chapter 11 bankruptcy in Federal Court, effectively canceling a foreclosure auction at the facility that had been scheduled to take place on (date of story).
• Real Housewives Star Adds to Rising Rate of Foreclosure
  The Real Housewives of New Jersey star Teresa Giudice may be regretting the decision to build her lavish new home from scratch. Giudice and her husband, Joe Giudice, are now facing foreclosure on their newly built Lincoln Park, New Jersey home after their mortgage company filed a complaint in New Jersey Superior Court on October 9, according to an October 23 report from E! News.
• Senator Durbin and Others Protest ABA for Rising Number of Foreclosures
  On October 25, United States Senator Dick Durbin and nearly a dozen protestors issued calls for banks that received billions in bailout money to aid consumers who have fallen victim to bad loan practices and are losing their homes to foreclosure.Durbin specifically referenced a Chicago, Illinois neighborhood called Marquette Park, which is near Midway Airport, noting that, despite the nice appearance, each block has a foreclosed home.
• Foreclosures Continue to Rise in Missouri and Kansas
  According to statistics released on October 15 by RealtyTrac Inc., home foreclosures in Missouri and Kansas both saw an increase in September as the pace of foreclosures across the U.S. continued at a near-record pace. RealtyTrac said that in September, foreclosure activity in Missouri saw an increase of 8.8 percent in comparison to September 2008. Foreclosure activity for September in Kansas was up 22.4 percent from September 2008.
• City of New York Claims Right to "Tavern on the Green" Name
  The city of New York has filed suit against the operators of bankrupt Tavern on the Green, claiming the city has the sole right to use the historical restaurant’s name. According to the suit the city filed on October 21, the trademark, valued at $19 million by the operators of the restaurant, was the single largest asset in the bankruptcy estate.
• "Terminator" Franchise Up for Grabs
  The production company that owns the rights to the “Terminator” film franchise is seeking a buyer for the film rights after filing suit against a hedge fund firm and filing for bankruptcy.Halcyon Holdings Group has retained FTI Capital Advisors to look into strategic alternatives, which likely means selling the intellectual property rights, according to FTI Senior Managing Director Kevin Shultz.
• Jolt Energy Drink Company Files for Chapter 11
  Jolt Co Inc, the manufacturer of the famous Jolt Cola energy drink, has filed for Chapter 11 bankruptcy protection due to a dispute with drinks can manufacturer Rexam. The filing was on September 28 in Manhattan, New York.
• Adams Dairy Development LLC Declares Bankruptcy In Western Missouri
• Charter Extends Bankruptcy
  Bankrupt St. Louis-based U.S. cable operator Charter Communications Inc. has changed its debt restructuring deal with chairman Paul Allen, extending its bankruptcy until as late as December 15.
• Toni Braxton Hit with Foreclosure
  Singer Toni Braxton was recently hit with a foreclosure notice on her home in Century City, California.
• Filing Bankruptcy in St. Louis - New Median Income Amounts
  Qualifying to file a Chapter 7 in Missouri or Illinois requires passing the Means Test. New Median Income numbers have just been published by the U.S. Trustee's office.
• Chicago's Burr Oak Cemetery In Bankruptcy Court
  A scandal that involved digging up buried bodies to resell the plots - mixed with dozens of civil lawsuits - has Burr Oak Cemetery struggling through its attempts to sell off its assets during the bankruptcy process.
• Adams Dairy of Blue Springs Files Chapter 11
  On October 1, the developer of a retail project in Blue Springs filed for Chapter 11 bankruptcy protection. Adams Dairy Development LLC made the filing in U.S. Bankruptcy Court for the Western District of Missouri in order to protect it from creditors during reorganization.
• Chicago Cubs File for Bankruptcy
  On October 12, the Chicago Cubs filed for Chapter 11 bankruptcy protection, a move made so that their owner can sell the team in an $845 million deal. The filing was made in Wilmington, Delaware, was expected and the Cubs are only anticipated to spend a brief time under Chapter 11.
• Bankruptcy Judge Okays Sale Of Chicago Sun-Times
  A US bankruptcy judge has approved the sale of the Sun-Times Media group to James Tyree and a group of local Chicago investors. The Sun-Times petitioned for bankruptcy earlier this year.
• Illinois To Crack Down On Predatory Debt Settlement Companies
  Illinois state treasurer Alexi Giannoulias has warned consumers against most debt settlement companies - and has promised to further regulate the debt settlement industry to prevent those in debt from being hurt by these often predatory companies.
• Chrysler Moves Assets in Bankruptcy
  According to a report filed on September 20, the old assets of Chrysler LLC remaining in bankruptcy lost $12.1 billion in three months.
• Office Depot Sued During Bankruptcy Filing
  A former supplier has filed suit against Office Depot for $217, claiming that the company breached its contract in order to obtain supplies without paying. The supplier says the breach was a factor in its bankruptcy filing.
• Increase in Foreclosure Rescue Scams
  With foreclosure filings on the rise in Kansas City, housing counselors warn that there is also an increase in foreclosure rescue scams.
• Herbst Gaming Inc. Plan to Exit Bankruptcy Criticized
  According to a report from the Las Vegas Sun, key creditors and lenders that are owed hundreds of millions of dollars have harshly criticized a plan for Herbst Gaming Inc. to exit bankruptcy.
• Irwin Financial Corp Files Liquidation Bankrutpcy
  Irwin Financial Corp of Columbus, Indiana had its assets sold to First financial and was sold to a liquidation bankruptcy.
• Chicago Bankruptcies Still On Rise – With No End In Sight
  The number of individuals and the number of companies declaring bankruptcy in Chicago is steadily increasing - in large part due to the continuing trends of job loss, foreclosure, and economic woes.
• 10 Ways Sports Stars Ruin Their Finances
  These are ten ways that a sports star can ruin their finances and end up in Bankruptcy or foreclosure.
• What Companies Have the Highest Likelihood of Filing Bankruptcy This Year?
  This is a list of the top ten companies who have the highest likelihood of filing for bankruptcy sometime this year.
• Falling Gas Prices Lead Natural Gas Company to Bankruptcy
  Falling gas prices are leaving big natural gas companies like PNG Ventures Inc to file for bankruptcy protection.
• Chicago’s Bankrupt Sun-Times Likely To Continue Under New Management
  Months after filing for Chapter 11 bankruptcy, the Sun-Times Media Group out of Chicago is reorganizing, cutting costs, and ready to continue production with the same chairman but different financial backers.
• August Foreclosure Rates Fall
  According to a report from RealtyTrac released on September 10, the rate of home foreclosures in Missouri continued falling in August, in comparison to August 2008, while the rate increased in Kansas.
• Missouri Auto Industry Struggles After GM Bankruptcy Reorganization
  In the wake of the auto industry financial struggles, specifically the GM bankruptcy earlier this year, Missouri has found itself struggling to remain a successful player in the automobile industry when it comes to workers and plants.
• Foreclosure Prevention Efforts Doing Better
  The Obama administration is trying to prevent foreclosure but there is still an increase in mortgage defaults and need for debt relief.
• Ethanol Maker VeraSun Sells Property After October Bankruptcy
  After declaring Chapter 11 bankruptcy in October, ethanol producer VeraSun is now selling some of its Illinois farmland in order to pay back some of its debts.
• Bankruptcy Filings for Wealthy Families on the Increase
  Wealthy families have been filing bankruptcy all over America. The real estate market has left families at all income levels in financial trouble.
• Bankruptcy Up 22% In August From 2008
  bankruptcy rates continue to be significantly higher in comparison to this time last year - with the number of those filing for bankruptcy up almost 25 percent from last August. The reason for the rising rates is the difficult economy and housing market.
• Annie Leibovitz: Is Bankruptcy An Option?
  When you default on an enormous loan, is bankruptcy a good option for you? Celebrity photographer Annie Leibovitz can teach us about when it may be a good option to petition for bankruptcy and erase your debts.
• Historic New York Restaurant Files for Bankruptcy
  Tavern on the Green, historic New York restaurant, has filed for Chapter 11 bankruptcy protection.
• Samsonite Co. Stores Luggage Maker Filing for Bankruptcy
  Samsonite Co. Stores have filed for bankruptcy due to a decline in sales. Samsonite Co. sells luggage and travel materials and have attributed their financial disaster to the economy.
• Michael Vick's Bankruptcy Plan is Approved
  Michael Vick, quarterback for the Philadelphia Eagles, has been approved for this $20 million bankruptcy plan.
• Crestwood Developer Responsible for Over 15 Foreclosures
  Joseph Baumeister, of Crestwood, Missouri, pleaded guilty to bank fraud after using false documents and lies to purchase 16 homes. His actions resulted in many foreclosures in the St. Louis area.
• Charter Continues through November with Bankruptcy Plan
  Charter Communications Inc. will continue to reorganize their debt in an attempt to get a bankruptcy that can be approved by their principal lender, JP Morgan Chase.
• Foreclosures Are Declining In Parts of Missouri Despite a National Increase
  Foreclosure filings across Missouri are declining despite a national increase in foreclosure filings. Missouri counties wonder what has changed.
• Kansas City Man's Golf Club Sold in Foreclosure
  Gary McClung's Quintero Golf & Country Club in Phoenix, Arizona will sold in a foreclosure auction after the Kansas City developer ran into financial trouble.
• Smurfit-Stone Container Corp Files Chapter 11, Closes Plants
  Smurfit-Stone Container Corp, a St. Louis Missouri based company, plans to close plants in Portland, Connecticut, St. Joseph, Missouri, and Mansfield, Ohio after filing Chapter 11 bankruptcy.
• Kansas City Personal Bankruptcies Jump 25 Percent, Missouri 22 Percent
  Missouri and Kansas City are following the trend of the rest of the country - ever-increasing rates of bankruptcy due to the weak economy, job market, and housing market.
• Missouri-based Spectrum Brands Exits Bankruptcy
  A company with operations in Overland, Missouri, and Bridgeton, Missouri, has exited Chapter 11 bankruptcy after completing their reorganization plan.
• Eastern Missouri Developer Made Responsible for Foreclosures
  Robert Hartmann of Eastern Missouri was ordered to pay $34 million after he left banks and investors with properties in St. Louis that were not redeveloped or went into foreclosure.
• Lincolnshire IL Steel Tube Maker RathGibson Files For Bankruptcy
  Specialty steel tube maker RathGibson is feeling the effects of the economy as demand for products fell and cash flow problems began. Now the Illinois company is filing for reorganization bankruptcy.
• Hannibal: Historic Rockcliffe Mansion Owner Declares Chapter 13 Bankruptcy
  After filing for Chapter 13 bankruptcy, the owner of the historic Rockcliffe Mansion in Hannibal, MO, is trying to sell his property as well as the house's contents. A St. Louis man has made a bid on the mansion.
• Washington Park: Entire Southwestern Illinois Town Files For Bankruptcy
  A small village in Illinois, Washington Park, is filing for bankruptcy protection after facing a bevy of lawsuits, embezzlement scandals, and government inspections.
• Chicago Cubs To Benefit From Declaring Bankruptcy?
  The Tribune Company-owned Chicago Cubs may petition for Chapter 11 bankruptcy in order to smooth and speed a sale that would aide their own reorganization.
• Illinois Chrysler Plant Reopens In Belvidere After Bankruptcy
  After petitioning for bankruptcy two months ago and closing the doors of many of its auto plants, Chrysler is reopening an Illinois auto plant this week and boosting the local economy and morale.
• The Granite Source of Missouri Files For Chapter 7 Bankruptcy
  The story of the bankruptcy of The Granite Source of Missouri mirrors much of what is causing a rise in Chapter 7 bankruptcies in Springfield, MO.
• Automatic Stay Lifted, Plaza Square Apartments Facing Foreclosure In St. Louis
  After struggling with debts and other problems, Urban Developers, LLC, is losing the largest apartment complex in downtown St. Louis to foreclosure.
• Evanston, Illinois, Developer Files Individual Chapter 7 Bankruptcy
  Prolific builder Thomas Roszak is filing for both individual and company Chapter 7 bankruptcy in the wake of the housing crisis and a number of lawsuits.
• RiseUp Magazine Files For Chapter 7 Bankruptcy In Missouri
  After less than two months of issues, the insert publication RiseUp has declared Chapter 7 bankruptcy. The race relations magazine was based out of Kansas City, Missouri.
• Knight-Celotex Files For Chapter 7 Bankruptcy In Northfield, Illinois
  Fiberboard manufacturer Knight-Celotex has declared Chapter 7 bankruptcy after defaulting on a $34 million dollar loan from Bank of America.
• Illinois Foreclosures Up 54% From A Year Ago
  In Illinois, foreclosure rates are down for the month, but still over 50% up from this time last year. How does Illinois's foreclosure rates compare to the rest of the country?
• John Deere Home Faces Foreclosure In Moline, Illinois
  After years of failed renovations, the historic John Deere house is facing foreclosure in Moline, Illinois. The mayor is confident the next owner of the house will be able to turn it into a functioning property.
• May Bankruptcies Reach 6000 Per Day
  The number of individuals and companies filing for bankruptcies is skyrocketing as the poor economy affects millions of families across the country.
• Homeowners Lose In Senate Bankruptcy & Mortgage Modification Vote
  The recent bankruptcy reform bill - aimed at helping troubled homeowners keep their houses and modify their mortgages - did not pass the Senate this week.
• Illinois Attorney General Sues Debt Settlement Firms That Often Make Debt Worse
  Illinois Attorney General Lisa Madigan is cracking down on debt settlement companies that use unfair practices to take advantage of those struggling with credit card debt.
• Meadowbrook Farms Coop May Reopen Soon After Chapter 7 Bankruptcy
  Just over a month after filing for Chapter 7 bankruptcy, Meadowbrook Farms has two potential buyers. The pork processing plant closed in January, leaving 600 in Illinois without jobs.
• Chernin’s Shoe Outlet Running After Recent Chapter 7 Bankruptcy
  The shoe company that filed for Chapter 7 bankruptcy in February is reopening in three states, including Missouri and Illinois, with new owners at the helm of the bargain store.
• Chapter 7 Bankruptcy Puts Fate Of Historic Lincoln Hotel In Urbana Into Question
  Facing an auction on the courthouse steps, the owner of the Historic Lincoln Hotel declared bankruptcy to save the property from foreclosure.
• Associated Press: Bankruptcies Surging Across The Country
  Due to the poor economy and the housing crisis, bankruptcy rates have risen to pre-2005 numbers, with an expected high of 1.6 million bankruptcy filings expected next year.
• New Developments In Battle Over Possible Bankruptcy Law Changes
  The US Senate is still battling over changing the current federal bankruptcy laws to allow "cramdowns" - mortgage loan modifications that would allow many families to keep their homes safe from foreclosure.
• Cook County Courts To Halt Foreclosures Until Fall Due To Huge Caseload
  Due to the huge caseload of the Cook County Circuit Court, most 2009 foreclosure cases will be postponed until the beginning of September. Over 63,000 foreclosure cases are expected this year.
• Southern Illinois Farmer Gets 10 Years For Bankruptcy Fraud
  An East St. Louis bankruptcy fraud case ends in a ten-year prison sentence for a farmer from Southern Illinois. The man is also the prime suspect in a double murder case related to the bankruptcy fraud.
• Central Illinois Bankruptcy Rates Increasing
  Just as rates rise in other parts of the country, new information shows that Central Illinois is also seeing a significant increase in those declaring bankruptcy.
• Bad Economy Leads Even The Most Unlikely To Bankruptcy
  There are many reasons that lead people to bankruptcy, and with the economic crisis in full swing, even those most careful with their money can be put in the position to file for bankruptcy.
• Government Eyeing Bankruptcy Reform As Filing Mounts In Poor Economy
  The bankruptcy reforms of 2005 might have created as many problems as they solved, and the current economic crisis is not helping matters. Now, lawmakers are looking for more ways to improve the system.
• Chicago Tribune Reports That Economy Will Lead To Many Choosing Bankruptcy
  Is bankruptcy the best option for you and your family? The Chicago Tribune discusses why more people may be filing for Chapter 7 and Chapter 13 bankruptcy.
• St. Louis Couple Plead Guilty To Bankruptcy Fraud
  When they failed to alert the court to a pending workers' compensation claim, a formerly married couple found themselves guilty of bankruptcy fraud.
• Meadowbrook Farms Files For Chapter 7 Bankruptcy In Belleville
  After seven years in business, innovative hog co-op Meadowbrook Farms has declared bankruptcy and laid off many of its employees.
• Gas Stations Can Now Place $500 Hold On Your Visa Card
  As of October 3, 2008, gas stations are authorized to place up to a $500 hold on your Visa card each time you pump gas.
• Bankruptcy On The Rise In Missouri
  Due to the ongoing financial crisis, the rate of bankruptcy filings in Missouri have gone up by 26 percent in the last year.
• National Bankruptcy Law May Change
  In light of the economic crisis, national lawmakers are considering a temporary change to the bankruptcy laws that may help homeowners struggling to keep their house.
• $726 million in St. Louis Commercial Properties in Foreclosure
  A number of commercial properties - including several office buildings, a movie theater, and a hotel - are in foreclosure, while dozens more are in danger of following suit.
• Kansas City, MO, Group Works Toward Foreclosure Prevention
  Foreclosures in Kansas City are affecting entire communities - and now many neighbors are fighting to stop the continuing trend of housing loss in the area.
• Chernin’s Shoe Outlet In Chicago Files For Chapter 7 Bankruptcy
  After over 100 years in business, the Chernin Shoe Outlet will close and file for bankruptcy. This is the second filing, with the first taking place in 1999.
• Missouri Couple Avoids Foreclosure Under Contract For Deed
• Charter Communications may file for bankruptcy
• An Open Challenge To Dust Yourself Off
• Bankruptcy as a Step to Solvency
• Crestwood Court Macy's is among 11 set to close
• Bankruptcy filings jump by one-third in 2008
• Retailers Who Have Filed for Bankruptcy in 2008
• Brooke founder files for personal bankruptcy
• Feds adopt rules to crack down on some credit card abuses
• KB Toys Announces Bankruptcy Filing
• Payday loan problem: financial 'quick fix' leads to personal bankruptcy
• Consumer bankruptcy filings jump vs year ago
• St. Louis Foreclosure Help
• Exclusive millionaires club falls on hard times
• Credit cards: Cash infusion might not help riskiest borrowers
• Bailout, Bankruptcy or Both for Big Three?
• Bankruptcy Filings Effecting Circuit City
• Federal Bailout to Include Credit Card, Loan Companies
• Billionaire Club Files For Bankruptcy
• St. Louis Bankruptcy Filed For Another Business
• Bill collectors get tough, and complaints surge
• Crisis Now Trickles Down To Credit Cards
  On the heels of the foreclosure mess, the New York Times is now reporting that consumers are beginning to feel the strain of too much credit card debt. Lenders wrote off more than $21 billion in bad credit card debt in the first 6 months of 2008.
• St. Louis sports teams brace for economic downturn
• Foreclosure Proves Challenge For Government
  As the nationwide foreclosure numbers continue to rise, the U.S. government looks for ways to assist homeowners with the current crisis.
• Personal bankruptcies on the rise
• Bankruptcy Filings Approach All-Time High
  For the first time since the passage of the new bankruptcy law in 2005, the rate of new bankruptcy filings will approach well over 1,000,000 cases for the 2008 year.
• Credit cards, credit crunch: consumers feel pinch as issuers `go on the defense'
• St. Louis companies weather Wall Street storm
• House rejects $700 billion bailout bill
• Failed bailout vote hits Wall Street like a hurricane
• Wachovia's banking sold to Citigroup
• Commentary: Bankruptcy, not bailout, is the right answer
• St. Louis Private Schools Respond to Parents Who Need Economic Help
• Congress Votes No To $700 Billion Bailout
  The House of Representatives voted no today to proposed legislation to save the lending industry.
• Bankruptcy Proposal To Avoid Foreclosure Part of Government Bailout Legislation
  With the state of the current economy, we have all heard the news about the proposed government $700 billion bailout of the lending industry, but in an effort to help the average American homeowner, Democrats have added language to the bill that will allow bankruptcy judges to change mortgage terms to help those families avoid foreclosure.
• Why Criminal Charges Can Be Stopped By Filing Bankruptcy in St. Louis, Missouri
  A recent decision in the Bankruptcy Court in St. Louis, Missouri teaches us a lesson about the power of the protection of the bankruptcy law and what it can do to stop creditors from coming after you.
• Is My Money Safe With My Bank?
• Life After Foreclosure Isn't Pretty - Why Bankruptcy Can Help
  With the increasing number of foreclosures taking place today, many wonder what life is like when trying to get back on their feet once the foreclosure does happen.
• New Study Shows Declining Credit Card Use Among Americans Due to Economic Downturn
• Fenton, MO Chrysler Plant to Close
• Credit Card Debt Piling Up for Americans
• Alabama sewage job drags county down the drain
• St. Louis Post-Dispatch newspaper cuts 18 positions to trim costs
• Bankruptcy Cases Higher for Senior Citizens in Missouri and Illinois
  A new report shows that the rate of filing for bankruptcy in senior citizens over the age of 55 continues to dramatically increase.
• St. Louis Bankruptcy Attorney Reveals Subprime Lenders Confessions
  St. Louis, Missouri and Illinois Chapter 7 and Chapter 13 bankruptcy attorney James Brown uncovers a recent video and article which sheds light on the insider tactics used by the subprime lending business.
• Credit Counseling in St. Louis, Missouri and Illinois May Do More Harm Than Good
  Recent articles show that consumer credit counseling services may not be all they are cracked up to be. You don't want to find out after it's too late. The following information will be helpful if you are weighing the use of a credit counseling service or filing for relief under the bankruptcy code.
• How To Come Back From Bankruptcy
• Small businesses buried by credit card debt
• Bush signs sweeping housing bill
• Credit card gripes flood Fed
• Missouri cuts two interest-rate reduction programs for students
• Fallout From Bad Loans Rocks Regional Banks
• Missouri Lender pushes NovaStar closer to bankruptcy
• St. Charles County eclipses national, state unemployment rates
• In the Debt-Soaked Economic Slump, Americans Find Solace in Support Groups
• Bankruptcy for Elderly on the Rise in St. Louis Missouri and Illinois
• New Bankruptcy Law Isn't Helping St. Louis Debt Relief
• Chapter 13 Can Still Help As Home Foreclosure Surges 48% in May, 2008
• Tougher rules needed on credit-card policies
• 2 Ky. widows sue U.S. government over husbands’ VA deaths
• Diagnosis of blood clot at issue in malpractice trial
• Despite new laws, Chapter 7s are on the rise
• Lender's goof slams credit scores
  A foul-up by student-loan company Sallie Mae temporarily sends hundreds of thousands of Americans' scores plunging. Here's how to find out whether you got hit -- and what to do now.
• 10 ways for Missouri and Illinois consumers to curb sleazy debt collectors
  Consumers and regulators should act now, before things get ugly, to keep abusive and dishonest collectors under control during a bad economy.
• Bankruptcy Filings Expected to Soar as Economy Slides - Steady Increase in St. Louis Bankruptcy Filings
• Protect Your Credit In An Economic Downturn
• Foreclosure Assistance for Missouri and Illinois lost as Senate drops bankruptcy aid from housing plan
  Republicans and business-friendly Democrats on Thursday scuttled a plan to give people threatened with losing their homes more leverage in winning favorable loan terms from their lenders in bankruptcy courts.
• Employers cut 80,000 jobs in March
  Employers worried about recession slashed 80,000 jobs in March, the most in five years and the third straight month of losses.
  
  At the same time, the national unemployment rate rose from 4.8 percent to 5.1 percent, the clearest signal yet that the economy might already be contracting. The new snapshot of the job market, released by the Labor Department Friday, underscored the damage that a trio of crises —in the housing, credit and financial sectors — has inflicted on companies, jobseekers and the economy as a whole.
• 1st Annual Client Appreciation Picnic

Ohio Man Finds His Own Way to Avoid Foreclosure

A man from Ohio says that he bulldozed his $350,000 home in order to prevent a bank from foreclosing on it.

According to Terry Hoskins, he has struggled with the RiverHills Bank over his Moscow, Ohio home for several years and has had problems with the Internal Revenue Service. He said the IRS put liens on his carpet store and commercial property and the bank claimed his home as collateral.

Hoskins said that he owes $160,000 on his home. He said that he had finally had enough and bulldozed the home.

 

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Kansas City Foreclosure Rate Decreases, Still High for the Year

According to a February 11 report from RealtyTrac Inc., home foreclosure activity in the 15-county Kansas City area saw a decrease of 13.3 percent from December to January, but were still 66.9 percent higher than January 2009.

RealtyTrac, which is based out of Irvine, California, reported foreclosure actions, including default notices, scheduled auctions, and bank repossessions, against 1,596 in January. That was a decrease from 1,841 homes in December, but an increase from 957 a year ago.

The January total means that one out of every 544 households in the 15-county area received a foreclosure filing in January.

The most foreclosure activity took place in Jackson County, with reported filings against 962 homes, or one out of every 331. Wyandotte County was next, with 221 filings, or one out of every 307. Johnson County was third, with 195, or one out of every 1,113.

Missouri was the 32nd ranked state for residential foreclosure activity in January. Kansas was ranked No. 40.

Foreclosure actions were filed against 2,945 homes in January, a decrease of 6.9 percent from December, but an increase of 19.3 percent from January 2009. The most recent number represents one filing per every 905 homes.

In Kansas, foreclosures were filed against 708 homes, one out of every 1,733, which was a decrease of 33.1 percent from December, but an increase of 7.5 percent from a year ago.

Across the U.S., RealtyTrac reported January foreclosure filings against 315,716 homes, which is one out of every 409. That’s a decrease of nearly 10 percent from October, but an increase of 15 percent from January 2009.

Nevada remains the state with the highest foreclosure rate for the 37th month in a row. One out of every 95 Nevada housing units received a foreclosure filing in January, which is more than four times the national average.

The second-highest rate was in Arizona, with one out of every 129 homes, and Florida and California were next, each at one out of every 187 homes.

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Giants Player Plaxico Burress Faces Foreclosure

Plaxico Burress, the embattled former wide receiver for the New York Giants, could be without a Florida home to return to once he emerges from prison.

On January 22, the imprisoned Super Bowl hero and his wife, Tiffany, were hit with a $3.3 million foreclosure suit from Deutsche Bank National Trust Co., as a trustee for a mortgage-backed securities fund, according to Broward County Circuit Court records.

The suit was filed over the $2.9 million mortgage signed by Burress in 2005, covering his Lighthouse Point home, just north of Fort Lauderdale.

Burress purchased the 6,872-square-foot waterfront home for $4 million in 2005. Two years later, he moved his official residence from New Jersey to Florida.

Burress caught the game-winning touchdown in the final minute of Super Bowl XLII, when the Giants defeated the previously unbeaten New England Patriots. He was given a two year contract extension by the Giants in 2008 worth $7 million per year.

That fell apart in November 2008, when Burress went to the Latin Quarter nightclub in Manhattan with a gun tucked in his pants. The unlicensed weapon slid down his leg and fired a bullet into his thigh. He was released by New York at the end of the season.

Burress was charged by New York authorities with two counts of criminal possession of a weapon and one count of reckless endangerment in August 2009. He signed a plea deal to a lesser firearms charge and received a two year prison sentence.

Since being imprisoned, Burress has said in media interviews that he would like to return to the NFL after he emerges from prison in 2011. It is unclear if that would be enough to save his home.

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Tribune Co. Gets Extra Time for Bankruptcy Plan

On February 18, Tribune Co. was granted an extension on its exclusive right to file a reorganization plan in its Chapter 11 case by a U.S. Bankruptcy Court judge in Delaware. The extension was until March 31.

The extension provides Tribune Co. more time to attempt to reach a compromise between an increasingly belligerent set of senior and junior creditors representing nearly $13 billion in claims against the Chicago-based media conglomerate.

In his decision, Judge Kevin Carey also delayed until April 13 consideration of a motion by the Official Committee of Unsecured Creditors in the case seeking permission to bring a complaint of “fraudulent conveyance” against Tribune Co., which owns the Chicago Tribune and formerly owned the Chicago Cubs. He also pushed off consideration of a separate motion by a group of deeply subordinated bondholders calling for the appointment of an independent examiner to investigate the fraudulent conveyance claims.

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Former InBank CEO Files For Personal Chapter 7 Bankruptcy

A Chicago business woman has filed for Chapter 7 bankruptcy shortly after her troubling banking business failed last fall. The Chicago Tribune reported that Cynthia Grazian filed for Chapter 7 liquidation bankruptcy on January 22, 2010. She reported $2.2 million in assets and $4.3 million in debts when filing for Illinois bankruptcy.

Grazian is the former CEO of the troubled InBank, the company located in Oak Forest, Il, that was seized by the Federal Deposit Insurance Corp. in September of 2009. The bank began to deteriorate after Grazian wrote off $13 million in bad loans and lost millions more. As the bank’s troubles worsened, an August cease-and-desist order set by the Federal Deposit Insurance Corp. and the Illinois Division of Banking asked the bank to fire Grazian and to raise a sufficient amount of capital. InBank had been in business since 1970.

Most of Grazian’s assets are tied up in a posh Lake Shore Drive condo valued at $2.2 million. She made $272,501 at Inbank in 2008. It is not clear who her creditors are. 

Chapter 7 bankruptcy is a form of liquidation bankruptcy in which a person sells their assets in order to pay off some of their debts. In Illinois, there are a number of exemptions when it comes to the liquidation of assets and property. If you think Chapter 7 bankruptcy may be an option for your family’s financial situation, contact a specialized Illinois bankruptcy lawyer today.

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Missouri House Struggles To Save President Casino From Ruin

What will be the fate of the troubled President Casino, which has struggled trough the last year of tough economic times? The Missouri House may have a chance to decide the business’ fate with a new bill.

Although the Missouri Gaming Commission seems intent on stripping the President Casino of its gambling license, Missouri lawmakers may create a law that would allow the struggling casino to stay open. Why do MO politicians want to keep the facility open despite its many downfalls? Representative Tishaura Jones, who is presenting the bill, and St. Louis Mayor Francis Slay both say that keeping the doors of the casino open would save jobs and keep the city’s economy more stable in a time of great need for employment and business.

The bill, House Bill 1826, would make it illegal for the Missouri Gaming Commission to close a casino for economic purposes and is specially tailored to save the President Casino from its current predicament. At the beginning of the year, the gaming commission voted unanimously to close Present Casino.

Many Missouri lawmakers questioned the MO commission’s ability to say that President Casino didn’t meet standards when no standards were initially provided. At the same time, those who oppose the bill say that the new law would basically render the gaming commission powerless.

President Casino went bankrupt in 2006 and was bought by Pinnacle Entertainment. The casino has struggled for a number of years financially.

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Kansas City Star: Should Underwater Homeowners Walk Away From Mortgage

The latest real estate news is not heartening: home prices are dropping to new lows and an estimated 25% of all homeowners are underwater on their mortgages. If a family is in financial trouble and looking for a way out, how does having a home with a large mortgage and no equity factor into a solution?

According to the Kansas City Star, some homeowners are turning to strategic default: in which they walk away from their mortgage and their home and simply stop paying their bill. This decision, which ultimately ends in foreclosure, is a drastic one.

While recent reports show that most people are continuing to make payments on houses that are worth a fraction of what they were two years ago, others are deciding to break their promise to the bank and move on with their lives without their property. While some choose to honor the contact they hold with the bank, others can’t understand paying for something for the next thirty years that isn’t worth the money.

An added complication is that Missouri and Illinois law states that banks can take other property from you if you default on a loan, such as a car, your wages, or your savings. However, since mortgages are defaulting at record rates, banks often do not have the time to act.

Economists add that the cost of moving – both financial and emotional – may be higher than you think if you chose to strategically default on your mortgage loan. And that defaulting could make it significantly more difficult to buy a home in the future.

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Chicago Workers Protest After Duraco Files Chapter 7 Bankruptcy

Protests have broken out at the closed Duraco Products Plant near Chicago as workers demand to be paid wages for work already completed.

Duraco Products declared Chapter 11 bankruptcy in 2008 after the plastic injection molding company faced serious financial difficulties. The company’s factory is located in Streamwood, where roughly 20 workers manufactured planters and birdfeeders for the business. Now the company has been ordered by the US Bankruptcy Court to go into Chapter 7 bankruptcy following a rough two-year financial struggle.

When Duraco originally filed for Chapter 11 bankruptcy, the company listed its assets at around $50,000 and its liabilities at between $1 million and $10 million. While Chapter 11 reorganization bankruptcy allows companies to continue to function, Chapter 7 liquidation bankruptcy usually involves closing a building and selling its assets in order to pay its debts – Duraco has closed its doors.

Community organization Chicago Workers' Collaborative says that the non-union workers who are protesting are owed an estimated $150,000. Many of them had been working without pay for many months and some have lost savings, cars, and even houses while waiting for the fortune of the company to improve.

It is unclear how and if the workers will receive their lost wages, though many are planning to file lawsuits against the owners and to file claims with the bankruptcy court.

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Movie Gallery Closes Stores in Missouri During Bankruptcy

As a part of the national chain’s bankruptcy, Movie Gallery stores in Jefferson City and Fulton and one store in Columbia will be closed. In all, the company plans to close more than 2,000 video rental stores across the U.S.

Movie Gallery Inc., which is owned by Hollywood Entertainment Inc., filed for Chapter 11 bankruptcy protection on February 3. The action will allow the firm to continue operations as it restructures its debt. Included in the restructuring is the closing of multiple Movie Gallery, Hollywood Video, and Game Crazy stores across the U.S.

Across the past two years, the firm has closed several hundred underperforming stores across the U.S. However, that was not enough to keep the company from filing for bankruptcy. The firm plans to retain about 900 stores around the country, but as the process continues, others could be added to the closing list.

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Missouri Lawmakers Discuss Bill for Debt and Injured Workers

On February 15, lawmakers in the Missouri House considered a bill that would stave off bankruptcy in a state fund for injured workers.

The Second Injury Fund, which pays claims for workers with pre-existing injuries who are injured a second time on the job, has been in dire shape since 2005, when a cap was instituted on its revenues.

The bill the House heard would not boost the cap, but would move one class of injuries from the fund’s responsibility to be covered by employers’ workers’ compensation insurance.

Approval of the bill would result in increased employers paying increased workers’ compensation premiums, in turn increasing Second Injury Fund revenues, as the Fund is funded by a surcharge on workers’ compensation premiums.

During the committee hearing, unions and groups representing employers were tentatively in support of the bill, but others questioned whether it would eliminate the fund’s insolvency.

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Bankruptcy Rates Skyrocket 20 Percent In Missouri Ozarks

It is interesting to examine national bankruptcy statistics as the economy struggles to improve, but what is happening locally in regards to personal bankruptcy rates? According to the Springfield Business Journal, Western Missouri’s economy is still badly damaged and bankruptcies are up for both individuals and businesses in 2009.

In Springfield, Chapter 7 bankruptcies were up 18 percent while Chapter 13 bankruptcies were up 13.4 percent over 2008. Business bankruptcies were also up, by 90 percent, with 40 businesses seeking reorganization bankruptcy in 2009 as compared to 21 in 2008. All in all, according to the U.S. Bankruptcy Court in the Western District of Missouri there were 3,014 bankruptcies in 2009 as compared with 25,53 in 2009.  These are the highest rates of bankruptcy seen since the bankruptcy reforms of 2005.

Economists say that the recent recession is still tallying casualties in the Ozarks, with the poor real estate market and the poor job market contributing to a high rate of bankruptcies. In addition, the difficulty of securing credit is also harming both families and businesses in the area. Experts say that small real estate businessmen were also hit hard in the last few years. In other cases, some of those who have lost their job have not been able to find work before their unemployment benefits run out. 

The U.S. Bankruptcy Court Western Division includes Springfield, Joplin, Carthage, Jefferson City, Kansas City, St. Joseph, and surrounding areas.

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Host of Winter Olympics Ski Events Postpones Foreclosure

The owners of the Whistler-Blackcombe ski resort, site of many of the events of the 2010 Winter Olympics, have received a reprieve. Lenders had threatened to foreclosure on the resort on February 19 due to the owners being hundreds of millions of dollars behind in their payments.

The foreclosure date has now been postponed until February 26, two days before the closing ceremonies. Lenders, including now closed Lehman Brothers, have been attempting to put more pressure on the owners, Intrawest, to produce the past due payments ($500 million due in December 2009) as the Olympics are still taking place.

Intrawest, a company that owns other ski resorts besides Whistler, has been in deep financial trouble since the housing market crash. They had been counting on sales of properties adjacent to ski resorts to aid them with payments on the financing for the resorts. However, due to economic decline, housing sales have been slow and properties have lost value, creating a financial crisis for the company.

The lenders granted Intrawest a week’s reprieve on the foreclosure auction and talks continue to find a way to work around the problem.

Some analysts believe the foreclosure threats to be nothing more than simply threats and that foreclosure will not be the ultimate outcome. The Winter Olympics taking place at the resort has brought the story into the headlines. Other ski resorts have gone to auction during the current ski season and more could follow until the economy turns.

There are potential buyers for the resort, so a sale prior to foreclosure auction is still a possibility. Another potential option being discussed is bankruptcy, which would give the current owners additional time to seek a buyer or renegotiate the current loans.

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Electric Scooter Maker Vectrix Corp Relaunches after Chapter 11

Vectrix Corp., a company that manufactures electric scooters, has been relaunched under new ownership after entering Chapter 11 bankruptcy in the fall of 2009.

The new company, which is incorporated in Delaware, has made New Bedford, Massachusetts its headquarters in the U.S. and has leased space in the New Bedford Business Park that was occupied by the former incarnation of Vectrix, as well, according to the park’s executive director Thomas Davis.

Vice President of Sales and Marketing Brian Buccella said that the company has already placed a small team of development, operations, and sales staff in the New Bedford office and the needs for additional employees would be evaluated over the following 90 days.

Buccella says the New Bedford facility will eventually expand to include engineers and test facilities, sales offices, and a multi-product vehicle assembly line.

The former Vectrix Corp. filed for Chapter 11 protection in September and then reached a deal to sell the majority of its assets to New Vectrix LLC, which was sponsored by New York-based GH Venture Partners LLC. Court records say EVB Technology Limited, an affiliate of Hong Kong’s Gold Peak Industries, also holds an interest in New Vectrix LLC.

 

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FairPoint Communication Finalizes Bankruptcy Plans

The Associated Press says that after delaying for two months, FairPoint Communications Inc. has finally filed its plans for reorganization under bankruptcy in U.S. Bankruptcy Court in New York on February 8.

The North Carolina-based company originally was to file in December. However, the company delayed filing three times, saying it needed more time to negotiate with lenders and unions.

The company’s plan would reduce its debt load by nearly two-thirds, from nearly $2.8 billion to $1 billion, and would provide secured creditors with a 92 percent ownership stake in the restructured company. Unsecured creditors would be paid 17 cents for every dollar they’re owed.

In 2008, FairPoint purchased Verizon’s landlines in northern New England, but filed for bankruptcy in October 2008. The telecommunications company recently reached a tentative accord with two unions that represent more than 75 percent of its employees.

 

 

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Movie Gallery Finds Itself in Bankruptcy, Closing More Stores

Movie Gallery, the second-largest video store chain in the U.S., has retreated back into bankruptcy proceedings and plans to close 805 more stores.

The announcement was not much of an event at Hollywood Video in Boise, Idaho, which has been closing since January 20. Movies at that store have been marked all the way down to 70 percent off and likely will drop to 80 percent. The store is closing for good on February 14, according to a store employee.

The news hit harder in Emmett, Idaho, where the local Movie Gallery store’s closure will make a significant dent in the rental options of residents. Manager Ann Smith says she’s heard several concerns from her customers and they are unable to believe the news.

The Movie Gallery chain, which is based out of Wilsonville, Oregon, emerged from a 2007 bankruptcy eight months ago. But the chain recently filed for Chapter 11 bankruptcy protection from creditors, this time in Richmond, Virginia. The company warned that more stores will close after the first batch as the company continues to use the courts to restructure finances.

The 805 store closings represents approximately one-third of the chain’s stores. The company peaked at more than 4,600 stores across the U.S. in 2005. After this round of closings, the collection of Movie Gallery, Hollywood Video, and Game Crazy locations left will total around 1,900.

Just a decade ago, video stores were a ubiquitous part of the retail landscape. However, in the past few years, new competition from mail-order DVD rental services suck as Netflix and $1-a-night kiosks maintained in supermarkets and discount stores by RedBox or Blockbuster Video have caused them to battle for survival.

In the fourth quarter, Movie Gallery reported a $129 million operating loss after seeing its sales plummet to $1.4 billion in 2009, down from $2 billion in 2008.

 

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Two Downtown St. Louis Properties Sell Due to Foreclosure

Two former Pyramid Cos. properties in downtown St. Louis were sold on February 3 due to foreclosure.

The sole bidder for the One City Centre office tower was SCR Investments, led by Environmental Operations Inc. chief executive Stacy Hastie, for $12.7 million. Hastie as an individual was the lone bidder for the Arcade building for $9 million.

The St. Louis Development Corp. is working with SCR and Hastie on the rehab of the 25-story One City Centre building. Hastie called the purchase “a big step forward” for development plans.

The Missouri Development Finance Board approved a $5 million loan on February 2 for a $29 million overhaul of One City Centre.

Lewis, Rice & Fingersh signed a 12-year lease for 100,000 square feet of space at the 375,000-square-foot building with plans to move its 250 attorneys and staff there later in February.

A Cardinal Realty Group associate, Lina Galinurova, was in attendance at the auctions on behalf of a prospective California-based buyer for the Arcade. She wouldn’t disclose the buyer’s identity, but did say that the company would initiate talks to pursue ownership of the Arcade.

Plans by Pyramid Cos. to rehab One City Centre and convert the 15-story Arcade building fell apart in 2008 after the development company led by John Steffen closed.

 

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Obama Calls for Change in Loan Modification Program

President Barack Obama’s administration recently overhauled its struggling foreclosure avoidance program, saying that it would require homeowners seeking to ease their mortgage terms to document their financial situation before being granted a trial modification.

Previously, borrowers were able to have their interest rates lowered and the terms of their loans extended on a trial basis without providing pay stubs and other financial documents. Banks and other mortgage customer-service providers were supposed to collect that information during a three-month trial period, with the modification becoming permanent if the borrower made three lowered payments and submitted the required paperwork.

However, few permanent modifications were yielded by the program. Servicers say a significant number of borrowers failed to properly document their situations. Homeowners say banks were unreasonable and lost documents.

Between the time the program began in the spring of 2009 and the end of December, servicers extended nearly 1.2 million offers to modify mortgages on a trial basis. However, only 66,465 troubled home loans were permanently modified, according to the U.S. Treasury Department.

The new procedure, which loan servicers are to adopt by June 1, would provide troubled borrowers with what the Treasury Department called a “simple, standard package of documents” to complete in order for servicers to determine whether the borrowers qualify to receive a loan modification.

With that determination made in advance, any borrower who made three payments at the modified rate would automatically have the modification made permanent.

The purpose of the program was to provide billions of dollars in government subsidies to encourage lenders to forestall foreclosures.

In order to obtain said subsidies, servicers are required to cut interest rates, extend the terms of loans to 40 years, and suspend payments on part of the amount owed.

 

 

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Car Dependency Linked to High Foreclosure Rates

According to a recent report by the Natural Resources Defense Council (NRDC), homeowners in car-dependent areas without transit options have a higher risk of foreclosure. The NRDC has called for mortgage underwriting standards to start taking so-called “location-efficiency” into account.

The report is focused on the impact of location efficiency, a concept NRDC and other groups pioneered in the 1990s, on mortgage performance in three key cities: Chicago, San Francisco, and Jacksonville, Florida. The report shows that vehicle ownership is key to predicting mortgage performance and suggest that mortgage underwriters, policymakers, and real estate developers should take it into account.

Transportation costs account for approximately 17 percent of the average American household’s income. The report discovered that if driving is your only choice, you have considerably less economic flexibility. Said flexibility could protect homeowners from foreclosure in rough times.

 

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Reader's Digest Sells CompassLearning in Bankruptcy

According to Reader’s Digest Association Inc., the sale of its CompassLearning unity has received the approval of a bankruptcy judge and the publisher has reached an agreement with a pension group on claims that it may have forced the closing of its U.K. business.

Marlin Equity II LP won CompassLearning, which creates interactive teaching materials for schools and libraries, beating out four other bidders in an auction that took place on January 7. Marlin, which is run by El Segundo, California-based private equity firm Marlin Equity Partners, has agreed to pay $31.8 million, an increase from its initial offer of approximately $20.3 million in November.

According to Reader’s Digest spokesman William Adler, on January 12, the sale was approved by U.S. Bankruptcy Court Judge Robert Drain in White Plains, New York. Drain is scheduled to hold a January 15 hearing to consider confirming the Chappaqua, New York-based publisher’s reorganization plan to emerge from bankruptcy.

Under Reader’s Digest’s reorganization plan, the publisher’s $2.2. billion debt would be reduced by 75 percent to $550 million.

Reader’s Digest filed for Chapter 11 bankruptcy protection in August, citing a decrease in advertising spending and a high debt load incurred in its 2007 acquisition by Ripplewood Holdings LLC for $1.6 billion.

 

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Foreclosures Decrease in Polk County

In 2009, the home foreclosure rate in Polk County saw an improvement over figures from 2008, according to information from the office of the Polk County Recorder. In 2008, one out of every 86 homes was foreclosed upon, but in 2009, one out of every 91 was foreclosed upon.

Polk County fared better than the national average, which saw and increase from one out of every 54 homes in 2008 to one out of every 45 homes in 2009, or 2.2. percent, according to information from RealtyTrac Inc. The state of Missouri also saw an improvement from one out of every 84 in 2008 to one out of every 93 in 2009. The figures for total housing units are based on data from the 2008 U.S. Census Bureau.

The value of homes foreclosed upon in Polk County in 2009 totaled $12.1 million, approximately $2.5 million less than the $14.6 million in 2008. The value in 2007 was approximately $15.4 million and included the $5.5 million foreclosure of Springhill Falls apartments, the largest foreclosure in Polk County history.

According to Recorder Carol Poindexter, the decrease in foreclosure activity is evident in the smaller number of documents handled by her office in 2009. She says there were 5,599 documents last year and since she began keeping track in 1994, there have only been two years with a lower number.

 

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Illinois Auto Dealers Fight GM & Chrysler Bankruptcy Cutbacks

GM has been tallying profits and showing signs of new growth in the beginning of 2010. In addition, its cars have won several awards and it may well profit from the Toyota recalls of the last two months. However, following the auto company’s summer bankruptcy, in which the carmaker closed 12 auto factories and cut 20,000 jobs, GM is still facing issues with the hundreds of auto dealers that the company let go in 2009.

In Illinois alone, 107 car dealers are appealing the car company’s decision to close their outfits. Only one other state in the county has such high numbers of appeals filed.

The appeal proceedings will be handled by the American Arbitration Association. At this time, according to the Illinois Automobile Dealers Association, individual dealers are not yet discussing the appeals with the media. Many of the dealers remained opened, but have suffered without new car models coming in from GM and Chrysler. Other dealers closed their doors when dealer cutbacks were announced this summer.

The date of the car dealership appeals hearings have not yet been set.

General Motors filed for bankruptcy on June 1, 2009, and received roughly $50 billion in government stimulus funds to help them recover. The car company has staged a comeback since then, but is still facing a number of administrative woes.

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Muzak's Bankruptcy Plan Approved

According to a January 12 statement from music and entertainment company Muzak Holdings LLC, the company’s bankruptcy reorganization plan received the approval of a U.S. judge, paving the way for the company to emerge from bankruptcy later in January.

Muzak, best known for providing background music in stores, hotels, and elevators, filed for bankruptcy protection in February 2009 in order to restructure maturing debt.

The plan allows for the company’s lenders to trade debt in the company for equity, reducing the company’s outstanding debt to $230 million. The company’s debt was more than double that amount when it filed for bankruptcy.

Also on January 12, the company’s $108.75 million senior secured exit financing facility from GE Capital, Silver Point Finance, and MFC Global Investment Management received the approval of a U.S. bankruptcy judge in Delaware.

The company expects to exit bankruptcy by the end of January.

The company’s roots trace back to the 1930s, when it sold re-recorded music for factories, elevators, and passenger ships. Muzak was owned by private equity fund ABRY Partners LLC when it filed for bankruptcy protection.

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New Study: Women More Often Victims Of Predatory Loans

Predatory lending has led to major country-wide economic issues and left thousands of families on the brink of foreclosure and bankruptcy. While some research has shown that predatory lending took advantage of the poor and the uneducated, a new study has found that subprime loans and predatory mortgage lending victimizes women more often than men. Latina and black women were four to five times more likely to receive subprime loans in comparison to white men between 2005 and 2008.

In-depth research funded by The Nation Institute and conducted by National Institute of Computer-Assisted Reporting at the Missouri School of Journalism in Columbia, Missouri, has found that while many are still suffering from the effects of a predatory loan that they can’t afford payments on, the majority of those people are women. After crunching the number from Home Mortgage Disclosure Act data, researchers found that Women whose loan debt amounted to a smaller-than-average percentage of their income were more likely to get bad or dangerous loans in comparison to men who had similar financial histories.

Why would this be the case? Some think that perhaps mortgage brokers thought that they could pull subprime loans off more successfully with women. Other point out that minority women, single women, and elderly women were preyed on more than other groups. Now many women are facing bankruptcy and foreclosure, especially since women tend to concentrate most of their assets into their homes. Women now make up 25% of all homebuyers.

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St. Louis Area Business Bankruptcies Skyrocket In 2009

While some signs point to a recovery economy and an end to the recession, other trends in St. Louis continue to worsen with no signs of recovery. In a new report release by Clayton, Missouri, accounting firm Hoffman Clark, it seems that St. Louis business bankruptcies are at their worst yet, with high number of bankruptcies in 2009 and shocking fourth quarter numbers that show the worst rate of business bankruptcies since the recession began in 2008.

All in all, the study reports that the rate of St. Louis area business bankruptcies has increased by 19 percent in comparison to the rate of business bankruptcies recorded in 2008. The accounting firm found that 398 St. Louis, Missouri, businesses filed for bankruptcy in 2009, compared with 334 bankruptcy filings in 2008.

A shocking 108 bankruptcy filings happened in the final fourth quarter of 2009, making it the worst three months of business bankruptcy filings in years. St. Louis bankruptcy rates rose 6 percent in the fourth quarter of 2009 from the third quarter of 2009 and 26 percent from the fourth quarter of 2008.

The numbers for this report were taken from the U.S. Bankruptcy Court for the Eastern District of Missouri with divisions covering St. Louis, Cape Girardeau and Hannibal, Mo.

While individual or personal bankruptcies were not included in this report, other studies have confirmed that personal St. Louis bankruptcies are at their highest point since the 2005 bankruptcy reform laws.

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One Missouri Woman’s Story Of Chapter 7 Bankruptcy

This week the St. Joseph, Missouri, News-Press covered some shocking Missouri bankruptcy statistic for 2009 and shared the story of one local woman’s struggle with credit card debt that ended in a petition for Chapter 7 liquidation bankruptcy.

The article tells the story of a young woman who because of the subject matter is going by the alias Angie. She is a single mom with a steady job and a solid credit score, but a high maximum on her credit cards makes her think it’s okay to spend a little extra and carry a balance. Soon, though, her life expenses began to pile up and she began spending more than she made. After she slowly spent her savings, she slowly began running up and maxing out four credit cars. Before she knew it, she was in debt $40,000 and had $700 monthly minimum payments.

Thousands of families find themselves in Angie’s position – single parents or families who simply spend a few hundred dollars a month more than they make can soon find themselves under a mountain of debt – and with quickly-rising interest rates into the 20s. Angie said she didn’t go crazy buying things she couldn’t afford, but that she simply bought an occasional item for herself or charged her children’s daycare costs.

Angie found that the best solution for her situation was filing for Chapter 7 bankruptcy in Missouri. She is now slowing rebuilding her credit with a credit card with a very low limit and is making sure to live within her means.

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Japan Airlines to File Bankruptcy Soon

Japan Airlines, the largest air carrier in Asia, is prepared to file for bankruptcy protection as early as January 19, according to media reports out of Japan.

The move, which is similar to a Chapter 11 filing in the U.S., would be one of the largest corporate failures in the history of Japan. Under provision of the law, JAL shares would be removed from the Tokyo Stock Exchange. The government-backed Enterprise Turnaround Initiative Corp. would then officially announce a restructuring plan for the airline involving pre-packaged court-backed rehabilitation, including a $3.3 billion injection from the fund.

Delta Air Lines and American Airlines are believed to be two major U.S. companies in the running to invest in the troubled Japanese airline.

 

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Yellow Pages Publisher Makes Final Push to Emerge from Bankruptcy

Yellow pages publisher R.H. Donnelly has cleared the final obstacle on its path to emerge from bankruptcy by winning court approval for its reorganization plan.

On January 12, the plan received the approval of U.S. Bankruptcy Judge Kevin Gross at a hearing in Delaware. The plan also has the overwhelming support of creditors.

David Swanson, the CEO of the Cary, North Carolina-based company, believes the decision will allow them to be able to complete their restructuring within the next few weeks. He believes the company will emerge from bankruptcy protection as a stronger business “with a more management capital structure and a stronger financial foundation.”

Most of the plan was negotiated with creditors prior to Donnelly filing for Chapter 11 bankruptcy protection in May 2009.

The plan will reduce the company’s debt by $6.4 billion, in turn reducing its annual interest expenses by $500 million. Creditors to which the company owes approximately $6 billion in unsecured debt will receive virtually 100 percent ownership of the business, wiping out the last vestiges of shareholder value. The unsecured creditors will also receive approximately $300 million in debt.

Donnelley publishes directories in 28 states.

 

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Several Loan Modification Scammers Indicted in San Diego

A group of four people, including a convicted felon and two real estate brokers, has been indicted on charges of running an investment scam preying on Filipinos in San Diego, California.

The group, which initially was investigated by The San Diego Union-Tribune in March 2009, is faced with more than 54 charges, including foreclosure consultant fraud, grand theft, and securities fraud. The group allegedly persuaded families to transfer ownership of their homes to two trusts, with the promise that the group would help them modify and lower their mortgages.

The defendants are 52-year-old Edmundo Rubi, 59-year-old Joseph Encarnacion, 51-year-old Ben Hebron, and 53-year-old Gloria Hebron.

The FBI and the San Diego County District Attorney’s Office conducted the investigation. The grand jury handed down the indictment on December 21, but it was sealed until January 11.

 

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St. Louis Business' Bankruptcy Filings See Big Increase

According to a recent study, the number of businesses in the St. Louis area that have filed for bankruptcy saw an increase of 19 percent in 2009.

In a report released by Hoffman Clark, an accounting firm out of Clayton, Missouri, on January 11, 398 St. Louis businesses filed for bankruptcy in the year ending December 31. That number is an increase from 334 in 2008 and 176 in 2007.

The number of businesses that filed for bankruptcy in the St. Louis area in the fourth quarter of 2009 was 108, the highest quarterly number since the recession began. That represents an increase of six percent from the third quarter of 2009 and 26 percent from the same quarter in 2008.

The Hoffman Clark Business Bankruptcy Trends Report focuses on bankruptcy filings involving business debts. Non-business bankruptcy filings, also called personal or consumer bankruptcy filings, are not included in the report.

 

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A Sinkhole In Battlefield, MO – Family Declares Bankruptcy

Many people have the misconception that those who file for bankruptcy in Missouri simply don’t understand how to manage their money or simply spend more than they make. However, more often than not bankruptcy is used as a solution to an unforeseeable emergency. This was certainly the case for the White family, who filed for bankruptcy in Battlefield, Missouri, after their house literally sank into the ground.

Kasey and Kandice White were enjoying their new home in Greene County when their five-year-old son Danny discovered an enormous hole near the foundation. The sinkhole meant that their home was built on a rock joint – common in the Ozarks. Although the family could fix the hole for tens of thousands of dollars, the home’s value would plummet. And although the home had house insurance, sinkholes are not covered because they are considered an act of god.

In the end the best option for the Whites was to walk away from their home and the $50,000 of equity they had in it. The family declared bankruptcy and got a fresh start in a new home built on a solid foundation.

Your home is your biggest asset – and if it is irreparably damaged by an unforeseeable cause not covered by your home insurance, you could lose almost everything you have in one fell swoop. In times like these, bankruptcy may be the best option for you and your family. Especially if you are suffering from other financial strains – the Whites also had an unexpected surgery and a job loss – bankruptcy could be the answer for you.

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Florida Courts Hope to See an End to the Foreclosure Crisis

The chief judge of the court Pinellas-Pasco court system in Florida is hoping 2010 will bring relief for judges, consumers, and lenders caught in the growing morass of the worst foreclosure crisis in the U.S.

According to Pinellas-Pasco Circuit Court Chief Judge J. Thomas McGrady, the caseload is nearly 2,000 foreclosure cases per judge. And with 2009 coming to an end, McGrady says the cases continue to stack up twice as fast as judges can resolve them. The workload for judges handling all kinds of civil cases has nearly tripled because of the rapidly increasing number of foreclosures, which has roughly doubled each year for the past three years or so.

McGrady says that if you add in foreclosures to other civil matters, judges in Pinellas and Pasco are struggling to keep up with their dockets and are falling behind in many cases. He says the total now reaches more than 3,400 cases per judge.

Recently, the Supreme Court of Florida offered one solution in a court order essentially calling for mandatory mediation for homesteaded properties before the legal process of foreclosures can begin. Said order establishes a system of mediation management and shifts the cost burden to lenders to encourage homeowners to renegotiate loans instead of simply giving up and walking away.

As of now, McGrady says in Pinellas and Pasco counties alone, there are more than 23,000 open foreclosures. The Supreme Court estimates the number in Florida to be more than 456,000, placing the state at the epicenter of the nation’s foreclosure crisis.

McGrady says the situation will only grow worse until the foreclosure situation is resolved.

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Brown’s Chicken & Pasta Inc. Files for Chapter 11 Bankruptcy

A chain of chicken restaurants that made headlines across the U.S. in 1993 when seven employees at one of its stores in suburban Chicago were killed has filed for Chapter 11 bankruptcy protection.

On December 29, Brown’s Chicken & Pasta Inc. filed for bankruptcy, two months after the company was ordered by a DuPage County judge to pay more than $800,000 to a former vice president and minority shareholder who filed suit for wrongful termination.

According to the company’s attorney, Brown’s was unable to pay the judgment. He said $300,000 of that amount was due on the day the company filed. He says it would have made them “insolvent.”

The company’s filing listed assets between $100,000 and $500,000, liabilities of as much as $10 million, and 50 to 99 creditors.

The filing is the latest in a series of setbacks for the company. The franchise once had as many as 150 stores, but that number has declined to approximately three dozen since the murder of seven employees at one of its restaurants in 1993. Their bodies were discovered in a walk-in cooler.

The company’s attorney said the incident and the “constant barrage” of negative publicity had a significant impact on the company. The story was front page news across the nation for several days and in the Chicago area for several months. The story continued making headlines for years due to the hunt for the suspects, the arrest of two men years later, and their convictions on murder charges, the first years ago and the second two months ago.

The company successfully defended a number of lawsuits in the years following the murders, but the money and time spent on the suits left an impact on the company.

Brown’s plans to keep its restaurants, all but three of which are owned by franchisees, open as the company restructures. The company’s attorney says the three stores the company owns are to be closed or sold within the next 30 days.

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Tiger Woods' Sponsor to File Chapter 11 Bankruptcy

TLC Vision Corp., the eye-care service company that sponsors pro golfer Tiger Woods, has filed for Chapter 11 bankruptcy protection in order to restructure its debt.

In the documents the company filed in U.S. Bankruptcy Court in Wilmington, Delaware on December 21, the company listed assets and debt of $100 million to $500 million. Affiliates TLC Vision (USA) Corp. and TLC Management Services Inc. also sought bankruptcy protection.

According to TLC Vision, it reached an agreement to restructure debt with some senior lenders prior to the filing. In order to expedite the process, a pre-arrange plan was included. The plan provides for conversion of some debt to 100 percent of new equity of TLC Vision (USA), which will emerge as a private company, according to TLC.

A spokesman for the company, Stephen Phillips, said that the company’s relationship with Tiger Woods would continue with no changes.

The Chesterfield, Missouri-based company seeks approval of $15 million in debtor-in-possession financing, authority to use of cash collateral, permission to pay critical vendors, and employee wages and benefits.

TLC Vision operates laser vision-correction centers in the U.S. and Canada. No other affiliates including TLC Laser Eye Centers are involved in the filing.

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US Fidelis Headquarters to Be Sold in Foreclosure

One Wentzville, Missouri-based company will not remember 2009 as a banner year.

US Fidelis, which had more than 1,000 employees at the beginning of 2009, announced hundreds of layoffs earlier in December and recently said that it had stopped selling extended-service contracts.

Now word has come that the company’s headquarters will be sold in a foreclosure auction.

Frontenac Bank is publicizing the January 14 trustee’s sale. They say the brothers who began the company, Darian and Cory Atkinson, defaulted on their payments.

US Fidelis is also faced with legal scrutiny due to consumer groups and government regulars accusing the company of selling expensive after-market coverage offering limited value. The state of Missouri is also investigating claims of deceptive practices.

In spite of all the bad news, the company says the sale will not affect customer service operations.

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Foxland Harbor Marina Files for Bankruptcy to Prevent Foreclosure

An entity owning land off Old Hickory Lake in Gallatin, Tennessee planned for a marina has filed for bankruptcy protection in order to stave off foreclosure, according to a spokesman.

On the morning of December 28, Foxland Harbor Marina LLC filed for bankruptcy in the U.S. Bankruptcy Court in Nashville in advance of the foreclosure sale that lender American Security Bank & Trust had planned.

Included in the filing is an estimate of $1 million to $10 million in assets and liabilities.

Foxland is seeking approval from the Army Corps of Engineers to construct a full-service marina at Station Camp Creek.

American Security is also a lender to another company that filed for bankruptcy in December: Fairvue Club Properties, the owner of the Club at Fairvue at Fairvue Plantation.

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Maker of “Equal” Files Gets Approved for Chapter 11 Bankruptcy

On December 16, Chicago-based Merisant Worldwide Inc., the manufacturer of the artificial sweetener Equal, announced that a court had approved its reorganization plan under Chapter 11 bankruptcy.

The company is predicting that it could emerge from bankruptcy as soon as January 8, nearly a year after the company filed for Chapter 11, citing declining sales, a large load of debt, and the global credit crisis as factors.

Under Merisant’s plan to reorganize, the company would reduce its debt from $567 million to $147 million, dropping its annual cash interest expense from $36 million to $11 million. As a result of the restructuring, Wayzata Investment Partners, a private equity firm, will become Merisant’s majority and controlling shareholder.

Merisant had previously been largely owned by Pegasus Capital Advisors, another private equity firm.

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Employee Bonuses Get Approved in Lehman Brothers Bankruptcy

A bankruptcy judge has approved the plan of Lehman Brothers Holdings Inc. to pay $50 million in bonuses to employees handling derivatives contracts. The judge said the payments provide essential incentives to employees with “unique skills.”

In November, Lehman, the investment bank liquidating in bankruptcy, asked U.S. Bankruptcy Judge James Peck in New York for permission to pay the bonuses to approximately 230 full-time employees unwinding the contracts. On December 16, the judge sanctioned the payments as bankers, under attack after two years of failures and bailouts, risk more public ire by awarding year-end bonuses, according to a Bloomberg National Poll earlier in December.

In a November 25 filing, Lehman told Peck that the derivatives team had brought in more than $8 billion in cash and settled 17 percent of the contracts while under bankruptcy protection. The filing said that a bonus pool “designed to motivate and reward employees” in the group would help maximize the value of the remaining contracts.

Also during the court hearing, the judge informed Barclays Plc it could not have documents it sought from Lehman creditors and the trustee for Lehman’s brokerage, according to a spokesman for the trustee who declined to be named.

In September 2008, Lehman filed the largest U.S. bankruptcy with assets of $639 billion. Lehman’s creditors include UBS AG, the New York Giants, Abu Dhabi Investment Authority, and individual bondholders. The creditors have filed $824 billion in claims against the company.

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New York Governor Takes Steps to Protect Homeowners from Foreclosure

On December 15, New York Governor David Paterson signed into law stronger foreclosure regulations for the intended purpose of protecting New Yorkers from losing their homes, such as requiring better notice to homeowners faced with foreclosure and mandating settlement hearings with banks.

The law expands a package of regulations adopted in 2008 that mostly dealt with homeowners caught in the sub-prime mortgage crisis. The new laws require that banks provide a 90-day pre-foreclosure notice on all home loans, not just sub-prime loans.

Paterson and state lawmakers say the goal is to allow homeowners additional time to work with lenders in order to prevent foreclosures. Another regulation will expand to all homeowners mandatory settlement conferences with their lender, not just borrowers with sub-prime loans.

During the first three quarters of 2009, there were 39,923 foreclosure filings in New York, a decrease of 11 percent from the same period in 2008.

In spite of the decline, however, Paterson says that the new law was necessary in order to ensure that all homeowners were protected, not just homeowners who undertook risky loans.

According to Josh Zinner, co-director of the Manhattan-based Neighborhood Economic Development Advocacy Project, New York is the first state to require settlement conferences for all pending foreclosures.

Other components of the law include:

-Requiring lenders who serve a 90-day foreclosure notice on a homeowner to file with the state Banking Department within three days, allowing the state to provide assistance to distressed homeowners.

-Establishing protections for tenants in foreclosed properties by requiring that they receive written notice of a change in ownership and be permitted to remain in their home for the remainder of their lease term or a period of 90 days, whichever is longest.

-Enhance consumer protections to prevent homeowners from falling prey to scams and prevent brokers who perform distressed property consulting services from accepting upfront fees.

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Maryland Women Get Restitution in Foreclosure Rescue Scheme

As part of a settlement, two mortgage firms based out of Owings Mills, Maryland accused of running a “foreclosure rescue scheme” have agreed to pay $110,000 in cash restitution as part of a settlement that saved the homes of two elderly women in Ellicott City, Maryland, one of whom has died since becoming a victim.

In 2006, the two women fell behind on their mortgage payments due to poor health and related bills. They responded to a refinancing offer contained in packets labeled “Your Best Hope has just arrived.” However, instead of the rescue from the brink of foreclosure they were promised, the women learned that they had unwittingly signed away the titles to their homes and were facing eviction.

At that point, Howard County, Maryland consumer protection officials stepped in by filing a lawsuit against Stewart D. Sachs, president of Bay Capital Corp., which sent the letters, and Heavyweight Title Co. They also obtained a temporary restraining order preventing the eviction of 63-year-old Betty J. Bullock, who was legally blind at the time she signed the mortgage papers, and 68-year-old Griselda Mason. In October 2008, Bullock died due to a stroke.
Both women had been told they could get out of debt in two years, but were then charged rents so high they were unable to afford staying in their homes.

On December 15, county officials announced that a final settlement had been reached. The agreement restored ownership of the homes to Mason and Bullock’s granddaughter, who was living with Bullock. Sachs and Heavyweight agreed to no longer conduct any commercial lending in Howard County for a three year period and never use “unfair deceptive trade practices” again, according to officials.

Additionally, Sachs must pay $10,000 in investigation costs and restitutions and Heavyweight must pay $100,000 to the victims.

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Chicago Business Bankruptcies Increase By One Third In Third Quarter

As 2009 draws to a close, many consumers and business owners are looking for the signs that the recession is over – and signs that it may continue to affect our lives, our jobs, and our finances. While housing purchases are on the rise and the foreclosure rate is dropping, others look at the number of bankruptcies around the country and wonder if we are exiting our time of crisis.

For example, as personal bankruptcies skyrocketed this year, Chicago-area business bankruptcies also continue to increase. According to the Chicago Tribune (which has faced its own recent bankruptcy issues), the number of businesses filing for bankruptcy in Chicago, Illinois, increased by 36 percent this quarter compared to the same quarter last year. The Administrative Office of the U.S. Courts reported that Northern Illinois recorded 14,529 bankruptcies in the last three months, roughly 500 business bankruptcies and 14,000 personal bankruptcies. These numbers rival the high numbers of bankruptcies filed in 2005 before the bankruptcy laws were changed.

In the last three months nationally, business bankruptcy rates have risen 33 percent. While the November 2009 numbers are down 18 percent from October 2009, they are up 12 percent in comparison to November 2008. All in all, economic experts predict that 1.4 million Americans will declare bankruptcy this year.

The high numbers of bankrupt individuals and business is being tied to high unemployment rates, a poor housing market, weak consumer confidence, and the recent difficulty in procuring credit.

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Attorney General Chris Koster Holds Florida Company Responsible in Mortgage Scam

According to Missouri Attorney General Chris Koster, he is filing suit against a Florida company that took money from distressed Missouri homeowners, but failed to provide and meaningful mortgage-modification service. Koster is joined by the Federal Trade Commission and the State of Iowa.

Since Koster began his campaign against mortgage fraud in April, this is the eighth lawsuit he has filed against a fraudulent mortgage business.

Koster said his office has “instituted a zero tolerance policy for any mortgage modification firm that preys on and cheats desperate homeowners.”

According to Koster, First Universal Lending, LLC, is based out of Palm Beach Gardens, Florida, but transacts business throughout Missouri. He says that the company markets itself as providing services for homeowners who are struggling to pay their mortgages or are faced with foreclosure and promising them lower house payments or interest rates. However, he said they appear to do little or nothing for the majority of its customers.

Additionally, he says, representatives from the company have told some clients to stop making payments on their mortgages while the modifications process was proceeding, which harms the customers’ credit rating and results in higher late fees, penalties, and interest payments and increases the likelihood of foreclosure.

Koster says that the business requires an up-front fee before providing services, which is illegal for mortgage modification companies according to Missouri law.

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Missouri’s TLC Vision Corp. Seeks Bankruptcy Protection

One of Tiger Woods’ sponsors, TLC Vision Corp., has filed for reorganization bankruptcy – a move which will allow lenders to own the company and take current shareholders out of the picture. The company, which has continued to support Tiger Woods, is an eye surgery outfit that is based out of Chesterfield, Missouri.

The company, who has dealt with financial difficulties for over a year, is seeking approval of $15 million in debtor-in-possession financing and permission to pay employee wages, employee benefits, and key vendors. The company will also pay certain secured and unsecured creditors. The company’s Chapter 11 bankrupty filing announced between $100 and $500 million in assets and between $100 and $500 million in debts.

A company spokesperson said that despite the bankruptcy reorganization and other issues, their organization’s relationship with Tiger Woods had not changed. The company has continued to operate during the bankruptcy proceedings – care for patients will continue and employees would not see changes.

"We expect to emerge swiftly from Chapter 11 with a stronger balance sheet and able to better capitalize on our industry leadership position," Chief Operating Officer of TLC Vision Jim Tiffany told the media.

Since laser surgery vision correction is not normally covered by health insurance, laser vision companies have seen record losses during the recent recession. TLC Vision share trades have been very low over the last week, with shares hovering between 4 and 15 cents.

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Pace of Home Foreclosures Continues Decline in Missouri and Kansas

According to the latest market report from RealtyTrac, the pace of home foreclosures in Kansas and Missouri continued to decline during the month of November.

According to the report from the California-based institute, foreclosure actions in Kansas saw a decrease of 5.49 percent from October to November. The state reported a total of 878 foreclosure proceedings in November, down 0.03 percent. The report said the state ranks 37th nationwide.

The report said that Missouri reported a total of 3,217 proceedings during the month of November, which ranked the state 27th nationwide.

The report also said that the foreclosure rate in Kansas for November was a decrease of 24 percent from November 2008. In Missouri, the rate had decreased 11.5 percent from November 2008.

Across the U.S., November was the fourth straight month in which the foreclosure rate declined after hitting a record high in July, according to the report. Foreclosure filings nationwide for November decreased eight percent from October, but were still an increase from November 2008.

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Illinois Foreclosures Decreasel; Missouri Isn't as Likely

According to new data from Irvine, California-based RealtyTrac, the number of St. Louis-area properties at some point in the foreclosure process increased 15 percent from October to November and increased 10 percent from November 2008.

A total of 2,040 properties, or one out of every 604 homes, were in the foreclosure process in November, according to the report, which was released on December 10.

The metro area examined by the report included the City of St. Louis and the surrounding 16 counties in Missouri and Illinois.

Foreclosure activity in Illinois saw a decrease of nearly 18 percent from a record high in October, but the 16,422 properties in foreclosure in November was an increase of nearly 108 percent from November 2008 and the third-highest nationwide.

In Missouri, foreclosure filings held steady at 3,217 in November in comparison to October, but that was still an increase of 11.5 percent from November 2008.

Across the U.S., foreclosure filings were reported on 306,627 properties during November, which was a decrease of nearly eight percent from October. However, that number was still an increase of 18 percent from November 2008.

According to RealtyTrac chief executive James Saccacio, November was the fourth consecutive month in which U.S. foreclosure activity declined after reaching an all-time high in July.

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How Could The Medical Bankruptcy Fairness Act Help?

Currently, the Medical Bankruptcy Fairness Act is an amendment to the health care bill and could soon be a stand-alone bill. But what would this act mean for those facing financial difficulty due to medical bills, and what would this act mean for taxpayers?

The Medical Bankruptcy Fairness Act would make it somewhat easier for families facing bankruptcy because of a medical emergency to go through the bankruptcy process and return to their lives. The act has come into the spotlight after a recent study that appeared in The American Journal of Medicine revealed that 62 percent of bankruptcies involve medical bills and that even families with thorough health care coverage can go bankruptcy during a medical emergency because of copays, premiums, deductibles, lost wages, and other related reasons.

Under the new act, those declaring bankruptcy because of a medical emergency would not have to attend the same mandatory credit counseling sessions that others must pay for – since the sessions are meant for those who do not have a satisfactory understanding of finances, they are not geared for and are sometime insensitive toward those who have declared bankruptcy because of a sick loved one. The act would also make the process easier, give the filers greater flexibility and give filers a better chance of keeping their home.

In theory, the new act would not cost the taxpayers anything – it would simply create a slightly different bankruptcy process for those who have survived medical emergencies, but who have not survived financially intact.

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Arcade Building Downtown St. Louis Faces Foreclosure

According to media reports, a foreclosure sale for the Arcade building in downtown St. Louis has been scheduled for December 31.

Deputy Mayor for Development Barbara Geisman called the planned sale “a step toward getting the property back into circulation and get it redeveloped.”

A plan by Pyramid Cos. to convert the 15-story building into condominiums fell apart when the development company led by John Steffen shut down in April 2008. Pyramid, through an affiliate called Arcade Owner Inc., is still the owner of the building, one of several commercial properties Pyramid owns that have yet to be transferred to successor owners.

The Arcade project’s lender was Bank of America.

St. Louis’ Land Clearance for Redevelopment Authority approved a resolution in October that approved a resolution to declare the historic building blighted and to authorize 10-year tax abatement and the search for a redeveloper for the half-million-square-foot building.

At one time, the Arcade housed dozens of jewelers and other retailers, but has been shuttered for several years. Many of the windows on the building are either boarded up or covered in tattered plastic.

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Shakira Claims Bankruptcy As Part of Her Success

Colombian pop star Shakira, whose hit single “Hips Don’t Lie” is the most played record in American radio history, says she became a musical sensation and global philanthropist due to her family filing for bankruptcy when she was 8-years-old.

At the age of 18, Shakira founded the Barefoot Foundation, a charity to aid poor children in her native Colombia receive an education. She later expanded her reach to become a UNICEF goodwill ambassador.

And all of that began when she had the rug pulled out from under her as a child in Barranquilla, Colombia.

In a recent interview with CNN, Shakira said she vividly recalled the day “which I entered our apartment and my dad had sold all the furniture we had and the air-conditioning. We lost both our cars.” She said she was “very upset.”

“I couldn't believe my eyes, I couldn't believe how my parents allowed such a failure in business,” she said.

Shakira said because she was struggling to embrace the bankruptcy, her parents took her to the park, where she saw “many kids who were orphans and barefoot and sniffing glue.” She said her parents wanted “to show me another reality that was much worse than mine to make me gain perspective on things.”

The Grammy Award-winning singer said that it was that visit to the park that changed her life. She said she made herself a promise that day to “someday succeed to vindicate my parents’ social and economic position.” But she said she also wanted to do something about children like the ones she saw that day.

Shakira, who is a singer-songwriter, musician, producer, dancer, and philanthropist, described herself as being “obsessed” with child education and its contribution to national and global security.

Shakira, who has sold more than 50 million albums worldwide, said that she believes education “not only boosts economic growth, but also guarantees national and global security.

She described education as being “without a doubt” the best strategy for fighting poverty.

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Home Foreclosures Decrease for Missouri and Kansas Overall

According to the latest market report from RealtyTrac, the pace of home foreclosures in Kansas and Missouri continued to decline during the month of November.

According to the report from the California-based institute, foreclosure actions in Kansas saw a decrease of 5.49 percent from October to November. The state reported a total of 878 foreclosure proceedings in November, down 0.03 percent. The report said the state ranks 37th nationwide.

The report said that Missouri reported a total of 3,217 proceedings during the month of November, which ranked the state 27th nationwide.

The report also said that the foreclosure rate in Kansas for November was a decrease of 24 percent from November 2008. In Missouri, the rate had decreased 11.5 percent from November 2008.

Across the U.S., November was the fourth straight month in which the foreclosure rate declined after hitting a record high in July, according to the report. Foreclosure filings nationwide for November decreased eight percent from October, but were still an increase from November 2008.

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Foreclosure is Next for Family After Their "Extreme Makeover"

The team from the popular ABC reality series “Extreme Makeover: Home Edition” might provide worthy families with a new home, but yet another family who appeared on the show has learned that they don’t guarantee you’ll keep that new home forever.

Five years ago, the Wofford family of Encinitas, California received their new home. However, they now say that after struggling to pay their bills for two years, they’re now faced with foreclosure. Dr. Brian Wofford, a widower and father of eight, said that many people believe that you get the mortgage when you get the house, but that isn’t the case.

The Woffords are not the first family to appear on the show that has faced serious financial troubles after their home makeover. Last year, the Harper family of Atlanta, who received the biggest house to date on the show, along with the money to pay taxes on it for 25 years, faced foreclosure after taking out an ill-advised $450,000 loan using the house as equity. At least four other families featured on the show have either had to sell or lose the homes they received. ABC may be considering changing the rules to the show in order to prevent future disasters.

There is still hope for the Wofford family. Their bank, OneWest, has promised them loan modification papers. But if they don’t go through, the bank will auction off the house.

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Popstar Shakira Learned Life Lesson From Family Bankruptcy

Though she is a millionaire world music entertainer now, Shakira grew up surrounded with poverty and in a home where her parents decided to declare bankruptcy. Now Shakira looks back on the bankruptcy with thankfulness.

Though many know Shakira for her top-of-the-chart hit songs and clear voice, the Columbian pop sensation is also known for her philanthropy. Just months after she became a world-famous performer and singer, Shakira began the Barefoot Foundation, which works to educate impoverished Columbian children receive an education. Currently, she also works as a UNICEF goodwill ambassador.

However, the musical artist was not always in the position to help. When she was eight years old, her parents declared bankruptcy and sold most of what they had in order to clear their debts, including the furniture and air conditioning. When Shakira became visibly upset, her parents took her to a public park, where real poverty existed – children without food, families, appropriate clothing, or roofs over their heads. It was then that she understood that although her family was struggling, they were not at rock bottom.

Today, Shakira’s lesson about bankruptcy and poverty has turned her into an adult concerned with education and schooling for all children. She believes that education does not only help communities but also decreases gang violence and increases equality between the sexes. Shakira herself is perusing her dream of a college education at the University of Southern California.

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Business Bankruptcies In St. Louis Soar In Third Quarter Of 2009

According to the St. Louis Business Journal, the end of the recession has not meant the end of business bankruptcies in Missouri or St. Louis. Just as the rate of personal bankruptcies in Missouri rose in the third quarter and for the year, local businesses are following the same trend.

Hoffman Clark, a Clayton, Missouri, accounting firm has released a new report on the number of St. Louis business bankruptcies – a report that says in the last year 378 St. Louis, Missouri, businesses declared bankruptcy. This is an increase of 19 percent over the number of bankruptcies recorded in 2008. It is an increase of 250 percent from the number of business bankruptcies in 2007, before the recent economic recession began.

Petitions for bankruptcies by businesses reached 104 in the third quarter. This is an increase of 16 percent over the number of bankruptcies filed in St. Louis by businesses in the same quarter of 2008. In comparison to the same quarter of 2007, bankruptcy filings for St. Louis businesses were two and a half times higher. The report does note, however, that the number of business bankruptcies declined in the third quarter in comparison to the second quarter of 2009 – a trend that may mark the end of the worst of the recession.

The data used in the report was taken from the U.S. Bankruptcy Court for the Eastern District of Missouri, which mostly covered St. Louis and the surrounding area.

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Borders May Face Bankruptcy

In the wake of British chain WHSmith backing out of a deal with Borders, the U.S. megastore bookseller is desperately seeking to fight off bankruptcy and Chapter 7 liquidation.

Some don’t believe WHSmith being involved in the bidding made sense to begin with, as Borders is a bookseller and WHSmith is more of a news agency.

The situation with Borders could be seen as similar to Linens ‘N’ Things, another potentially viable company that was sunk by leverage in an overpriced equity deal. They ran into funding problems right as the credit crunch struck. Starved for capital, they were liquidated.

According to a report in The Telegraph, Borders is believed to be holding discussions with groups including HMV as the threat of collapse draws nearer.

In July, Channel 4 chairman Luke Johnson’s Risk Capital Partners purchased Borders in a management buyout backed by private equity firm Valco.

But competition from supermarkets and the continued growth of online retailers as the recession continues reducing consumer spending has hit Borders. The company also has suffered from the tightening in the credit insurance market, which has made it difficult to obtain stock from suppliers.

The company’s management is now uncertain that it does not have enough cash to trade successfully during the busy Christmas period.

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Credit Card Delinquencies Decrease According to TransUnion

According to an analysis by TransUnion, one of the three U.S. credit bureaus, credit card delinquencies in the third quarter saw a decrease of six percent in comparison to the previous quarter.

The highest rates of delinquency were seen in Nevada (1.98 percent), Florida (1.47 percent), and Arizona (1.35 percent). Those three states are also among the four states with the highest rates of foreclosure. Adding in California, the four states had 43 percent of all foreclosures started in the third quarter, according to the Mortgage Bankers Association.

TransUnion said that the credit card delinquency rate, borrowers 90 days or more delinquent on one or more of their bank-issued credit cards, across the U.S. saw a decrease to 1.10 percent in the third quarter of 2009, which was a decrease of 5.98 percent from the previous quarter. In the year-to-year comparison, however, credit card delinquencies remained flat from 1.09 percent in the third quarter of 2008.

Average credit card borrower debt, the total owed on all bank-issued credit cards for an individual, slightly decreased across the U.S. 1.87 percent to $5,612 from $5,719 in the previous quarter and decreased 1.71 percent from $5,710 in the third quarter of 2008.

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Florida Has Highest Rate of Foreclosure

Being in first place isn’t always a good thing. For example, Florida currently holds the distinction of being the state with the highest rate of foreclosures in the U.S.

According to a report in The Palm Beach Post, nearly one out of every five home loans in the state was delinquent in payments by 90 days or more, or was somewhere in the process of foreclosure during the most recent quarter.

Florida has nearly 3.5 million outstanding loans across the state and more than 13 percent of those are in trouble. This type of economic behavior does not bode well for a recovery. It also indicates that another large group of foreclosed homes is soon to crash into the real estate market with a resounding thud.

This somewhat alarming statistic is not helped by another problem: Florida’s 11.2 percent unemployment rate. Experts are not expecting employment to alleviate before the second quarter of 2010, by which time projections show the rate having risen to 11.4 percent.

Florida’s foreclosure numbers may seem high, but according to the Mortgage Banker’s Association, nearly one out of every seven loans in the U.S. is in foreclosure, an increase from one out of every 10 at the beginning of 2009.

Nevada, California, and Arizona closely follow Florida in foreclosure rate. Combine, the states are responsible for 43 percent of the new crop of foreclosures due to hit the market.

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Attempted Block on Charter's Emergence From Bankruptcy

Lenders, stockholders, and bondholders are attempting to block St. Louis-based Charter Communications Inc.’s emergence from Chapter 11 bankruptcy while they appeal a judge’s approval of the cable company’s reorganization plan.

On November 20, a group of lenders led by JPMorgan Chase & Co., stockholder R2 Investment LDC, and Law Debenture Trust Co. of New York, a trustee for holders of $479 million in bonds, filed motions with the U.S. Bankruptcy Court in the Southern District of New York asking that Judge James Peck hold off on his order approving the bankruptcy plan while they appeal.

The lenders say the confirmation order “compels financial institutions to lend a post-bankruptcy reorganized company $8.4 billion, on pre-bankruptcy terms, over the lenders’ objection.”

Charter and Chief Executive Neil Smit said they anticipated objectors filing an appeal to the confirmation. However, they expect the plan will take effect even if an appeal is still pending.

Attorneys for Charter said that any delays in the company’s emergence from bankruptcy could result in the loss of “hundreds of millions of dollars of additional interest,” and place the entire plan in danger.

According to Charter, it has paid more than $37.9 million per month of default and incremental interest and more than $129 million in legal and adviser fees during the bankruptcy process.

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More Renters Left With Foreclosed Properties

A new wave of foreclosures could harm people who may have never even taken out a mortgage: renters. In cities like New York, Chicago, and Los Angeles, where many investors are carrying upside-down mortgages on large rental buildings, some tenants are seeing their homes fall apart along with the financing.

In the first three quarters of 2009, 475 foreclosure proceedings were begun against multifamily rental or cooperative homes in Washington D.C., according to NeighborhoodInfo DC, a partnership between the Urban Institute and the D.C. Local Initiatives Support Corp. That figure already eclipses the 458 foreclosures for all of 2008.

In Cook County in Illinois, 328 multifamily rental buildings were in foreclosure by the second quarter of 2009, in comparison to 185 in 2008, according to a study by the Institute for Housing Studies at DePaul University, which has not yet been released.

In Los Angeles, foreclosures for buildings with five or more units totaled 78, encompassing 1,344 units, within the first three quarters of the year, in comparison to 49 buildings and 432 units last year during the same time period and 13 buildings and 239 units in 2007.

New York housing analysts estimate the number of apartment units in the city that are at risk of default due to upside-down loans (property is worth less than is owed on the loan) to be between 50,000 and 100,000.

During the first nine months of 2009, Fannie Mae foreclosed upon 74 multifamily properties, in comparison to 25 during the same period in 2008.

The pattern has also showed up in smaller cities such as Lexington, North Carolina and Des Moines, Iowa.

The impact upon tenants is uneven. According to officials in New York City, the owners of the vast majority of buildings in foreclosure are likely to maintain decent standards of living. However, of the 200 properties on the city housing agency’s 2008 list of buildings with the most severe maintenance problems, at least 77 had been in foreclosure.

In buildings with a struggling landlord, maintenance will typically be the first thing to go. Garbage can pile up, lists of overdue repairs lengthen, and vermin multiply.

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Good News on Foreclosures in Missouri and Kansas

There is some encouraging news on the rate of home foreclosures in Missouri in Kansas. Financially troubled homeowners are not out of the woods yet, but the worst may be over.

According to a report from RealtyTrac, in October Kansas reported a 27 percent decrease in home foreclosures in comparison to September. Though the number is up from the rate in October 2008. With a total of 1,313 foreclosure actions, Kansas ranks 37th overall for October.

In Missouri, home foreclosures saw an increase of 2.03 percent from September to October. However, the number was a decrease of 12.36 percent from October 2008, Irvine, California-based real estate firm RealtyTrac said. With a total of 3,218 foreclosure actions, Missouri ranks 30th overall.

Foreclosures across the U.S. saw a decrease for the third consecutive month in October, another sign that the worst of the housing crisis could be over.
 

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Case on Loan Modifications May Appeal Ruling

In Minneapolis, Minnesota, a federal judge has dismissed a lawsuit filed by a group of Twin Cities homeowners claiming that charged loan service companies are improperly implementing the federal government’s loan modification program.

The suit, which a public interest group in St. Paul, Minnesota filed this summer, also asked that U.S. District Judge Ann Montgomery issue an injunction preventing bank foreclosures in Minnesota from going forward. In an order issued on November 9, Montgomery said the request had been denied.

Mark Ireland, the attorney who brought the suit by the Foreclosure Relief Law Project, said that the group was reviewing the decision in order to determine if it would file an appeal.

The suit targeted the federal Home Affordable Modification Program, which the Obama administration introduced in the spring in an effort to fight the high number of bank foreclosures in the U.S.

In a separate release on November 10, the Treasury Department released the latest performance numbers on the program, which provides loan servicers with incentives to modify loan terms for struggling borrowers.

According to the Treasury Department, the cumulative number of trial modifications provided through the program stood at 650,994 at the end of October, an increase of nearly 34 percent from the 487,081 trial modifications that had been initiated as of September 30.

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Medical Bankruptcy Rate Increases – Even For Those With Health Insurance

In November, we are focusing on the common causes of bankruptcy filings. Unlike many may assume, the vast majority of bankruptcies are not due to overspending, but rather due to an unexpected life emergency or life event. While bankruptcy experts knew that medical emergencies were a common reason that families go bankrupt, a new study from Harvard University has revealed that even more people than previously thought file bankruptcy because of medical bills. Even more shockingly, many of these families in medical emergencies have some form of health insurance coverage.

In Kansas City, Missouri, Tonni Brende of Independence and her family looked torward bankruptcy after a string of medical problems. A son with cerebral palsy and a Hepetitis C diagnosis for Brende broke the family’s bank even though they had Medicaid and other health insurance coverage.

Another person, Jim Trinidad of Liberty, Missouri, cares for his 29-year-old son, who has been in a vegetative state since a car accident 12 years ago. While Medicaid covers some costs, Jim has to turn down work and spend much of his day caring for his son’s medical needs – needs he will have for the rest of his life.

Both Missouri families turned to bankruptcy after facing medical bills and other related financial challenges that they were simply not a match for. They are just two examples of MO people who were responsible with their money – but unprepared for the unexpected medical tragedies that affected every aspect of their lives.

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Missouri Bankruptcy Filings Continue to Soar – 23% This Federal Fiscal Year

Just as economists and bankruptcy experts predicted, bankruptcy rates are up again this year in the state of Missouri, with more than five out of every 1000 people across the state filing for bankruptcy during the 2009 federal fiscal year. This number is a 23 percent increase from the 2008 filings. The federal fiscal year ended on September 30 and the bankruptcy statistics were released last Wednesday by government officials.

Both personal bankruptcy filings and business bankruptcy filings increased this year – an increase that is blamed on the continuing high unemployment rates, the struggling housing market, and the economy as a whole. Bankruptcy rates in Missouri have not been this high since the bankruptcy reform laws took effect in 2005.

In fiscal year 2009, 30,025 people across Missouri filed for bankruptcy in the state’s federal court districts. Last year, 24,216 people petitioned for bankruptcy in Missouri.

Nationally, the number of bankruptcy filings was up 33 percent – with 1.4 million people declaring bankruptcy across America. Last year, just over 1.1 million people petitioned for bankruptcy. Business bankruptcies jumped 32 percent this year, with 45,510 companies filing so far in 2009.

Chapter 7 bankruptcies rose a shocking 42 percent, with 265,721 individuals filing in the third fiscal quarter. Chapter 13 bankruptcies, also known as reorganization bankruptcies, rose 15 percent, with 107,142 individuals filing in the third fiscal quarter. Nevada led the country in most bankruptcies per capital. 

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National Foreclosure Rate to Rise Through 2010 Experts Say

Many economists and organizations are saying that the recession is over – but does that mean that the rate of foreclosures and other housing woes will soon disappear? The Mortgage Bankers Association says that the answer is no. In all likelihood, foreclosure rates will rise, not drop, throughout 2010 even as other aspects of the economy are expected to improve. Currently, one in seven homes in America are either overdue or delinquent when it comes to their mortgage – the highest levels since 1972.

What are some of the reasons for this continued foreclosure plague? There are a number of factors:

•    The struggling housing market. Although the first time homebuyers tax credit and other incentives have helped the housing market, home prices are still down in many areas and one in four homeowners are upside-down on their mortgage.
•    Some adjustable rate mortgages (ARMs) have yet to adjust. A large number of the foreclosures that have already taken place came about because of ARMs that adjusted to rates far beyond what the homeowner could ever pay. Even more ARMs are set to adjust in the next year – which will prove to be bad news for a significant number of homeowners.
•    Unemployment is still high. As Americans continue to struggle to find work, deal with pay cuts, or lose their jobs, mortgages that were once easy to pay are now impossible. With job prospects projected to remain weak in 2010, it is likely that many out-of-work families will face issues with foreclosure.
•    Too many houses on the market. Because of the foreclosures and short sales already flooding the market, and because of a hesitant group of homebuyers, housing prices have fallen across almost all markets, lessening the value of most homes.

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Herbst's Post-Bankruptcy Layoffs

On November 9, bankrupt gaming giant Herbst Gaming confirmed that it had laid off workers throughout the company. The announced layoffs come less than two weeks after a bankruptcy court judge in Reno, Nevada approved a plan that will hand the company over to its secured lenders sometime in 2010.

According to Herbst general counsel Sean Higgins, the layoffs accounted for less than five percent of the company’s workforce.

Upon its filing for Chapter 11 bankruptcy in March, Herbst reported that it employed approximately 5,400 workers, which was down from total of 6,450 employees the company reported to the Securities and Exchange Commission on December 31.

The company’s current employee numbers were not available.

On October 31, U.S. Bankruptcy Judge Gregg Zive approve a plan to hand the 15 casinos and 600-location, 6,400-machine Nevada slot route to a group of lenders that holds $876.5 million in debt.

Twelve of the casinos the company owns are in Nevada, two of them are located in Missouri, and one is in Iowa. The company also owns the 275-room Terrible’s hotel and casino in Las Vegas.

The company also owns three casinos in Primm, Nevada – Whiskey Pete’s, Buffalo Bills, and Primm Valley Resort – which it acquired in 2007 from MGM Mirage.

Under the company’s reorganization plan, the lenders will receive 100 percent of the company’s casinos and slot routes. The new company will issue $350 million in new senior secured bank loans as part of the reorganization.

The reorganization will wipe out the equities of Timothy P. Herbst, Edward J. Herbst, and Troy D. Herbst. The brothers remain directors of the company, with Troy Herbst as chief executive officer.

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United Commercial Bank Shut Down by FDIC

In addition to the $3.2 billion the federal government lost earlier in November due to CIT filing for bankruptcy, another $1.7 billion is lost because of United Commercial Bank’s collapse.

San Francisco-based United Commercial Bank is the first financial institution that received TARP bailout money to be shut down by the Federal Deposit Insurance Corporation (FDIC). The so-called “healthy bank” received TARP funds of $299 million and its failure will result in a $1.4 billion loss for the FDIC.

Also on November 6, the FDIC seized institutions in Georgia, Michigan, Minnesota, and Missouri, bringing the total in 2009 to 120 and still rising. The total represents the most failures since 1992, when 181 banks were shut down by the FDIC.

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Fannie Mae Gives People in Foreclosure Chance at Leasing

On November 5, mortgage giant Fannie Mae announced a plan to allow people losing their homes to foreclosure to lease those properties back for up to a year at market rental rates.

The move is the latest in a series of steps by lenders attempting to manage inventories of foreclosed homes on their books in an attempt to keep a wave of properties from slamming a housing market that has shown recent signs of recovery.

The announcement came alongside a report that Fannie Mae suffered a third quarter net loss of $18.9 billion, in comparison to a second quarter $14.8 billion loss and a loss of $29.4 billion in the third quarter of 2008.

The most recent loss pushed the mortgage giant’s government regulator to request $15 billion from the Treasury Department on November 5. It was the fourth time the company had drawn on its federal financial lifeline since it and sister firm Freddie Mac were seized and placed under government stewardship.

According to analysts, Fannie Mae’s Deed for Lease Program would add to other efforts the federal government is making to aid the housing market by reducing the supply of cheap foreclosures on the market.

According to Fannie Mae vice president of equity investments Jay Ryan, the program would help stabilize neighborhoods. According to the firm, only borrowers who had exhausted other options, such as loan modification, would qualify for the program.

The program would also allow Fannie Mae to produce some income from the properties, many of which are underwater, while waiting for home prices to recover.

The company did not have estimates as to how many homeowners would qualify. In order to participate, borrowers must agree to convey all interest in a property to the lender. According to a November 5 filing with the Securities and Exchange Commission, the company recorded a total of 1,996 people agreeing to such a transaction within the first nine months of 2009.

The program requires that the home be a borrower’s primary place of residence. A borrower-turned-tenant would be required to document that the new market rental rate is no more than 31 percent of his or her gross income and be released from any subordinate liens on the property.

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Former Nebraska Football Star Goes Through Bankruptcy After Business Venture

Former Nebraska Cornhusker star Aaron Taylor may have seen a great deal of success on the field, but the failure of his Cornhusker-themed restaurant in Omaha and his subsequent bankruptcy are hitting him hard.

While at Nebraska, Taylor was a part of three national championship teams, was an all-American at center and guard, and won the Outland Trophy as the nation’s best interior lineman in 1997.

On (Saturday before story), it only took approximately 30 minutes to lose possession of some of the tangible evidence of his accomplishments.

A court-ordered auction saw the sale of Taylor’s Outland Trophy and seven championship rings. The Associated Press reported that the trophy was sold for a total of $6,800 and the diamond-encrusted rings sold for $2,000 to $5,900. In total, the auction brought in $28,500.

According to Philip Kelly, the bankruptcy trustee in the case, the identities of online bidders were not immediately available, but it did not appear that Taylor had submitted any of the winning bids. Some Nebraska fans upset with the situation donated money in an attempt to aid Taylor in purchasing some of his items.

Taylor attempted to exclude the memorabilia from bankruptcy liquidation, but his attorney informed him that under Chapter 7 bankruptcy law, the championship rings and trophy could not be excluded. Taylor’s case did not qualify for another type of bankruptcy that could have allowed him to keep the items.

In Taylor’s initial bankruptcy filing during the summer of 2008, he noted that he owed at least $109,543 and listed assets worth $5,300. That sum did not include the value of the rings and Outland Trophy.

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Pork Producer Goes Bankrupt; Some Blame on Swine Flu

A major pork producer in North Carolina recently filed for bankruptcy, citing complaints from unpaid vendors and declining consumption of pork due to fears over swine flu as reasons.

According to a report in Raleigh, N.C.’s News & Observer, Coharie Farms of Clinton, N.C., with a court appearance scheduled for November 10. According to Coharie owner Anne Faircloth, she plans upon liquidating the company and some of the 170 employees will be laid off.

Earlier in November, as many as 30 farmers complained of not being paid by Coharie for grain deliveries. Coharie’s debts to various vendors exceed $3 million.

The company blamed its losses on an increase in grain prices in 2008, a $20 decrease in hog prices, and unwarranted fears of swine flu driving down pork consumption. In 2009, Coharie has lost $17 million.

North Carolina’s pork industry is the second largest in the U.S.

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October Bankruptcy Rates Continue To Soar

While many economists claim that the most significant recession in recent history is officially at an end, the rate of bankruptcy filings across the United States is still skyrocketing. In addition, some are predicting even higher number next month and on into 2010.

Why are the bankruptcy numbers still going up, for both consumers and companies? Bankruptcy experts point to continued high rates of unemployment as well as the continued weak housing market that has left many families with upside-down mortgages. Many are still just one or two paychecks away from losing their house, keeping food on the table, and keeping their bills paid – while others are struggling with adjustable rate mortgages, medical emergencies without healthcare coverage, or other financial issues. The American Bankruptcy Institute predicts that 1.4 million people in America will file for Chapter 7 or Chapter 13 bankruptcy by the end of the year.

According to data collected by Jupiter ESources LLC, the October 2009 bankruptcy rates were higher than they have been since 2005, when bankruptcy laws were made stricter. In comparison to October 2008, 25 percent more people filed for bankruptcy, for a total of 131,200 bankruptcy petitions in just one month. Since the beginning of the year, 1.2 million people filed for bankruptcy – more than all of the 1.1 million bankruptcy filings in 2008.

Bankruptcy lawyers believe that while the economy on the whole is indeed recovering, certain sectors, such as real estate and finance, are still suffering – and that those involved in hurting industries are still struggling to keep their houses and their financial security.

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St. Louis Woman Charged With Concealing Assets In Chapter 7 Bankruptcy

This week we covered an important topic that all people considering bankruptcy should know about: What Happens When You Don’t List Everything in Your Bankruptcy? The answer, as you might guess, is that you can be charged with bankruptcy fraud and may face severe consequences including prison time.

Just last month, the American Chronicle reported on the bankruptcy fraud case of 45-year-old Julie Lynn Wagman, a St. Louis, Missouri, woman who filed for Chapter 7 Bankruptcy in August of 2005. When listing her assets as part of her bankruptcy petition, the MO woman tried to hide several assets from the courts, totaling over $50,000. According to United States District Judge Catherine D. Perry, the woman failed to list several expensive pieces of jewelry, including a Rolex watch, a tennis bracelet, and her wedding ring. While she did not list her expensive items, she did list several items under $300.

During her divorce proceedings two years later, the property was discovered and Wagman admitted that she had purposefully omitted her expensive items during the bankruptcy proceedings. She later pleaded guilty to making false statements during a bankruptcy proceeding. She has been ordered to serve five months in prison and five months of house arrest. In addition, she must pay $54,400 in restitution for her bankruptcy fraud.

The lesson here is simple: as with all things, honesty is the best policy – and in a bankruptcy procedure, anything less than honesty could end in prison.

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Foreclosure Filings Up in Missouri in the Third Quarter

According to a report released on (Thursday before story) by Irvine, California-based RealtyTrac, the number of home foreclosure filings in Missouri saw an increase of 8.3 percent in the third quarter, as the recession bested efforts to aid struggling borrowers with holding on to their homes.

The report showed that during the July-September period, 7,892 foreclosure filings took place in Missouri. The number is a decrease of 11.2 percent from the third quarter in 2008, but RealtyTrac noted that some of the records had stopped being collected in January.

Filings include default notices, auction-sale notices and bank repossessions.

One out of every 335 Missouri housing units was foreclosed upon during the third quarter. That rate is considerably lower than the national average of one out of every 136 households, ranking the state 30th nationally.

RealtyTrac said that in September alone, foreclosure filings in the state saw an increase of 26.3 percent from August, putting the number at 3,154. That was also 8.8 percent higher than the September 2008 total.

Across the U.S., the number of September filings decreased four percent from August, but was still the third-highest month since RealtyTrac’s report began in 2005.

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CIT Group May File for Prepackaged Bankruptcy

CIT Group Inc., the 101-year-ld commercial lender attempting to avoid collapse, could soon file for a prepackaged bankruptcy after reaching agreements with billionaire Carl Icahn and Goldman Sachs Group Inc.

Under the agreement, Icahn will supply a $1 billion loan for “supplemental liquidity” that could be used as bankruptcy financing, according to the New York-based company. Goldman Sachs will keep a credit line open, should the lender file for court protection.

The accords were disclosed one day after a deadline passed for CIT to solicit votes in support of either a $30 billion out-of-court debt exchange or a prepackaged bankruptcy. CIT seeks to reduce its debt by at least $5.7 billion after being locked out of credit markets it relies on for funding and posting nine quarters of losses totaling more than $5 billion.

The prepackaged plan would give CIT bondholders 70 cents on the dollar in the form of new notes and equity in the reorganized company. If CIT is forced into a “free-fall” bankruptcy, unsecured claims could fetch as little as six cents on the dollar, according to CIT chief executive officer Jeffrey Peek.

On October 28, CIT said that it had arranged a $4.5 billion term loan that can be used in bankruptcy.

If the prepackaged plan receives approval, the company plans upon filing for bankruptcy before $800 million of bonds mature, according to people familiar with the situation who declined to be identified.

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Missouri Forgives Debts for Students at Bankrupt Helicopter School

Under the terms of a settlement between Student Loan Xpress, Missouri, and 11 other states, the company will forgive nearly $113 million in debt for students who obtained loans to attend a now-bankrupt helicopter training school.

According to an October (Tuesday before story) statement from Missouri Attorney General Chris Koster, the state’s victims will be entitled to more than $2.9 million in student loan forgiveness.

Las Vegas-based Silver State Helicopters began operation in 2002 as a training school to train small helicopter pilots. The company ultimately operated 34 flight schools across the U.S.

For a period of at least two years, Student Loan Xpress was the preferred student lender for Silver State, providing an approximately total of $172 million to more than 2,800 students across the U.S., according to Koster’s office.

Koster’s office said that records revealed that only a small percentage of students actually graduated from the school and the school had an exceptionally high drop-out rate.

Silver State had ceased operations and filed for bankruptcy by 2008, leaving students up in the air.

Koster’s office received a total of 53 complaints about the school going into bankruptcy and the student loans still owed.

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St. Charles Homebuilder Files for Bankruptcy

St. Charles, Missouri-based homebuilder Whittaker Builders has filed for bankruptcy protection. On October 15, the company, led by President Greg Whittaker, filed for Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Missouri.

In 2008, Whittaker was the fifth-largest homebuilder in the St. Louis metro area. However, the struggling real estate market did a great deal of damage to the company.

Whittaker’s revenue was $93.3 million in 2006, but decreased to $82.7 million in 2007 and $29.2 million in 2008. Nearly half of the company’s workforce was laid off, reducing the number of employees from 288 in 2007 to 150 in 2008.

According to the company’s Web site, Whittaker cites changes in the credit market as a driving force in the company’s decision to reorganize.

Whittaker said that he plans to personally invest $1 million to provide capital to the company during the reorganization period.

Whittaker says the company will remain open and continue to provide customers with warranty, service, and customer support.

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Leader of Waterford Speedbowl Staves Off Foreclosure

For the second time within the past three years, Terry Eames, the leader of the ownership group of Connecticut’s Waterford Speedbowl, has staved off foreclosure on the racetrack.

On (Friday before story), Eames and his group filed for Chapter 11 bankruptcy in Federal Court, effectively canceling a foreclosure auction at the facility that had been scheduled to take place on (date of story).

The action grants the group a chance to reorganize under the protection and supervision of bankruptcy court. According to Eames, all business affairs, including preparations for the 2010 racing season, would continue.

Eames said a giant multinational corporation made him an offer that would’ve turned the track into an industrial park, but he is “in love with this place as a racetrack and the community of people that make it that,” and is “determined to see this survive.”

Eames and his ownership group were received a loan from Southbury businessman and racing supporter Rocco Arbitell and business associated Peter Borrelli to avoid foreclosure by former mortgage holder Washington Mutual Bank.

Arbitell foreclosed on the ownership group in May 2008 after former track operator Jerry Robinson failed to pay property taxes. Eames and his group owe a debt of more than $750,000 to Arbitell and Borrelli.

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Real Housewives Star Adds to Rising Rate of Foreclosure

The Real Housewives of New Jersey star Teresa Giudice may be regretting the decision to build her lavish new home from scratch.

Giudice and her husband, Joe Giudice, are now facing foreclosure on their newly built Lincoln Park, New Jersey home after their mortgage company filed a complaint in New Jersey Superior Court on October 9, according to an October 23 report from E! News.

DLI Mortgage Capital Inc.’s complaint seeks to recover the family’s home because of the amount of owed money the family failed to pay.

On the popular show’s first season, Giudice said she decided upon a custom-built 12,000 square foot home because she believed buying a pre-owned home to be “unclean.” She paid for tens of thousands worth of furnishings in cash.

The show was renewed by Bravo for a second season earlier in October.

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Senator Durbin and Others Protest ABA for Rising Number of Foreclosures

On October 25, United States Senator Dick Durbin and nearly a dozen protestors issued calls for banks that received billions in bailout money to aid consumers who have fallen victim to bad loan practices and are losing their homes to foreclosure.

Durbin specifically referenced a Chicago, Illinois neighborhood called Marquette Park, which is near Midway Airport, noting that, despite the nice appearance, each block has a foreclosed home.

Durbin says the neighborhood is no different from others across the nation, during his speech at a downtown Chicago hotel conference room in from of approximately 500 protestors who had come to the city to protest the annual American Bankers Association meeting.

According to the accusations of Durbin and the protesters, the ABA lobbied against banking reform despite members receiving billions in federal bailout money.

The Obama administration has proposed cutting executive pay and bonuses for people who received the most bailout money. The administration has also proposed the creation of the Consumer Financial Protection Agency, which would be able to establish rules for consumer protection and prohibit business practices it deems unfair, dishonest, or abusive, among other things.

Several banking and business groups are in opposition to the proposed agency, saying that it would harm consumers by imposing so many new rules that companies would have to charge more for loans and credit, or not offer them at all.

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Foreclosures Continue to Rise in Missouri and Kansas

According to statistics released on October 15 by RealtyTrac Inc., home foreclosures in Missouri and Kansas both saw an increase in September as the pace of foreclosures across the U.S. continued at a near-record pace.

RealtyTrac said that in September, foreclosure activity in Missouri saw an increase of 8.8 percent in comparison to September 2008. Foreclosure activity for September in Kansas was up 22.4 percent from September 2008.

Missouri was ranked 29th in the U.S. for foreclosure activity in September with a total of 3,154 filings, including default notices, scheduled auctions, and bank repossessions. Kansas was No. 33 with 1,272.

September foreclosure activity for Missouri was an increase of 26.3 percent from August. Kansas’ was an increase of 20.5 percent.

Foreclosure activity across the U.S. was down four percent from August with 343,638. However, it was up 29 percent from September 2008. In spite of the decrease, the total for September was still the third-highest monthly total since RealtyTrac’s report began in January 2005. The highest was July 2009 and second was August 2009.

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City of New York Claims Right to "Tavern on the Green" Name

The city of New York has filed suit against the operators of bankrupt Tavern on the Green, claiming the city has the sole right to use the historical restaurant’s name.

According to the suit the city filed on October 21, the trademark, valued at $19 million by the operators of the restaurant, was the single largest asset in the bankruptcy estate.

The city is attempting to prevent the Leroy family, which owns the Tavern on the Green name, from opening or operating other establishments under the same moniker.

According to the Leroy family, they have owned the trademark since 1978.

Earlier in October, the operators filed suit against the city, seeking more time to auction the restaurant’s assets. The family has also argued that any new concessionaire could make much more profit by operating under the “Tavern on the Green” name.

The restaurant filed for bankruptcy protection in September after a new lease for the property was granted to another restaurateur.

The current operators have held a lease since 1974, but that least expires at the end of the year.

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"Terminator" Franchise Up for Grabs

The production company that owns the rights to the “Terminator” film franchise is seeking a buyer for the film rights after filing suit against a hedge fund firm and filing for bankruptcy.

Halcyon Holdings Group has retained FTI Capital Advisors to look into strategic alternatives, which likely means selling the intellectual property rights, according to FTI Senior Managing Director Kevin Shultz.

Halcyon’s version of the science fiction series, “Terminator Salvation”, which starred Christian bale, was released earlier in 2009.

However, despite big name stars and a powerhouse franchise, Halcyon encountered financial woes. The company’s principals, Derek Anderson and Victor Kubicek, filed suit against Kurt Benjamin, a former business executive with California hedge fund firm Pacificor. They allege that Benjamin had arranged for a $30 million loan to finance the film, but did not inform them that a hedge fund was the source of the money.

The filmmakers also allege that Benjamin encourage the company to develop a video game subsidiary, which accounted for much of the production company’s losses.

After filing for hedge firm, the producers filed for bankruptcy, alleging that they were forced into it by the hedge fund’s insistence on being paid back.

The bankruptcy court would have to approve and sale of rights.

According to Shultz, a sale could come in well over the $30 million that Halcyon paid to purchase the rights in 2007. He says there has already been a great deal of interest.

 

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Jolt Energy Drink Company Files for Chapter 11

Jolt Co Inc, the manufacturer of the famous Jolt Cola energy drink, has filed for Chapter 11 bankruptcy protection due to a dispute with drinks can manufacturer Rexam. The filing was on September 28 in Manhattan, New York.

According to Jolt’s court filings, the company agreed to purchase 90 million 23.5 ounce resealable cans from Rexam between January 2007 and December 2009. But due to the recession, Jolt has only been able to purchase 27 million as of the date of the filing.

Jolt has said that it must launch non-resealable cans to compete in the market, because Rexam’s resealable cans cost three times as much as non-resealable cans.

The company also said that it is not likely to secure additional capital to pursue the non-resealable can strategy due to Rexam’s claims and asserted liabilities.

In the bankruptcy filing, Jolt, doing business as Wet Planet Beverages, listed assets and debt between $1 million and $10 million. Rexam, which is owed approximately $2.1 million, was listed as the company’s largest unsecured creditor.

In 1985, Jolt Cola was created by C.J. Rapp as a highly caffeinated beverage. The energy drink is sold across the U.S., Canada, and Europe.

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Adams Dairy Development LLC Declares Bankruptcy In Western Missouri

A large, multi-purpose real estate project in Blue Springs has ended in the bankruptcy of the developer, according to the Kansas City Business Journal and KansasCity.com. The bankruptcy is freezing the foreclosure of the property in question, which is off of Interstate 70, while the company developing the land seeks new financial support.

The company, Adams Dairy Development, LLC, began a new project called Lake Ridge Village. The planned 104-acre real estate project would consist of a number of commercial and residential buildings, including 200,000 square feet of commercial space, over 400 residential units, and a nursing home. However, the mix of lofts, condos, shops, and offices did not develop as expected in the last two years. Only a few lots were sold.

Adams Dairy Development has one secured creditor, Heartland Bank. According to proceedings following the company's Chapter 11 bankruptcy petition, the developer owes the bank $11.4 million. A handful of unsecured creditors are also owed money, including the Jackson County Collector, who is seeking real estate taxes.

The company's Missouri bankruptcy lawyer said that the company is looking for a way out of their money trouble - a solution that might include finding new investors, building a joint venture, or using the land for a different development project altogether.

Other real estate developers are also breaking ground in the Blue Springs area around the Interstate 70-Adams Dairy Parkway interchange, but with more success.

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Charter Extends Bankruptcy

Bankrupt St. Louis-based U.S. cable operator Charter Communications Inc. has changed its debt restructuring deal with chairman Paul Allen, extending its bankruptcy until as late as December 15.

The agreement, which has been amended for the third time, to restructure debt held by Allen, a co-founder of Microsoft Corp. and other noteholders, was filed in bankruptcy court in Manhattan on October 13.

The amendment agreement allows for Charter to have until November 2 to emerge from bankruptcy, or until December 15 if the company has not been able to obtain the necessary permits and regulatory approval in connection with the reorganization plan by November 2.

According to attorneys for Charter, the company must get the required permits that cover areas serving at least 80 percent of its basic subscribers.

In March, Charter filed for bankruptcy protection due to a debt of $21.7 billion. However, at the time, the company said that it had reached agreements with key stakeholders that would allow it to emerge from bankruptcy within a matter of months.

The company originally reached the agreement with Allen and some of the noteholders in February. It called for Charter to reinstate $11.8 billion in debt at the same terms after the bankruptcy.

However, lender JPMorgan, on behalf of itself and other holders of $8.5 billion of Charter’s senior debt, opposed the bankruptcy plan, alleging that the company had violated its loan agreements.

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Toni Braxton Hit with Foreclosure

Singer Toni Braxton was recently hit with a foreclosure notice on her home in Century City, California.

The 40-year-old singer owes a total of $12,503.20 on a defaulted mortgage payment based on a loan from Bank of America. She recently defaulted on a City National Bank loan worth $900,000, which she pledged to repay in November. The bank says they haven’t received a check since April.

Braxton’s loan balance was renegotiated to $657,567.54 and she now owes $44,000 in interest. She says she took out the loan because of “financial difficulty.”

This isn’t the first time Braxton has fallen onto rough times financially. In the late 90’s, she fell nearly $4 million in the hole, forcing her to file for bankruptcy.

Braxton’s foreclosure notice was filed in September.

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Filing Bankruptcy in St. Louis - New Median Income Amounts

Under the Bankruptcy Law passed in 2005, to qualify for a Chapter 7 bankruptcy, you must first pass the Means Test.  The first step to see if you qualify for a Chapter 7 bankruptcy is to determine if your gross income for the last 6 months is above or below the Median Family Income for your household size in the state you live in.  The Median Income numbers are updated by the U.S. Census Bureau periodically which changes the initial qualification numbers for bankruptcy purposes.

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Chicago's Burr Oak Cemetery In Bankruptcy Court

After a plot to dig up bodies and resell graves was exposed earlier this year, Burr Oak Cemetery in Chicago has faced a number of problems, including debt. The fraught cemetery has been attempting to go through the process of Chapter 11 bankruptcy and sell off what assets it has, but now a number of lawsuits involving the recent plot-selling scandal could multiply the cemetery's financial problems. Allegedly, at least 300 bodies were dug up and discarded in the recent past from the troubled cemetery.

Cemetery operator Perpetua-Burr Oak Holdings of Illinois LLC had been planning to escape its money woes through a debtor-in-possession loan from Pacesetter SBIC Fund Inc., for almost half a million dollars. However, now the families of some of those buried at Burr Oak as well as the state of Illinois are filing lawsuits that will complicate financial matters and prevent any short sale of assets.

Perpetua Holdings of Illinois has already given control of their company to independent chief operating officer to run the cemetery in a court order approved by U.S. Bankruptcy Judge Pamela Hollis. In addition, Roman Szabelski of Catholic Cemeteries will act as an unpaid consultant in the matter.

Still, there is not a good idea of when the cemetery will reopen or how the roughly 50 civil suits filed against the company will be resolved. The clean-up and reopening was halted when the company declared bankruptcy - but now acting COO Howard Korenthal is expected to manage the crisis and return the cemetery to normalcy.

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Adams Dairy of Blue Springs Files Chapter 11

On October 1, the developer of a retail project in Blue Springs filed for Chapter 11 bankruptcy protection.

Adams Dairy Development LLC made the filing in U.S. Bankruptcy Court for the Western District of Missouri in order to protect it from creditors during reorganization.

The company is developing the Lake Ridge Village project in Blue Springs. The plan for the mixed-use project was to include 405 residential units ranging from high-rise estates to lofts, in addition to nearly 200,000 square feet of commercial space, according to Blue Springs Community Development Director Scott Allen.

The company’s lender, Heartland Bank, holds an $11.4 million claim on the development property, which is Adams Dairy Development’s only secured creditor.

Heartland was scheduled to foreclose on the property on October 2.

The company owes more than $100,000 in unsecured priority claims to multiple other unsecured creditors, in addition to a $2,218 claim by the Jackson County Collector for real estate taxes due December 16.

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Chicago Cubs File for Bankruptcy

On October 12, the Chicago Cubs filed for Chapter 11 bankruptcy protection, a move made so that their owner can sell the team in an $845 million deal. The filing was made in Wilmington, Delaware, was expected and the Cubs are only anticipated to spend a brief time under Chapter 11.

The bankruptcy filing is part of the plan of Cubs’ owner Tribune Co. to sell the team, Wrigley Field, and related properties to the family of TD Ameritrade founder Joe Ricketts.

In December, Tribune, which owns the Chicago Tribune and Los Angeles Times, filed for bankruptcy protection. However, the Cubs were not part of that filing. According to one bankruptcy attorney, the team’s period under Chapter 11 could be mere days, enough to protect the new owners from potential claims by Tribune creditors.

In 1981, Tribune purchased the Cubs for $20.5 from candy maker Wm. Wrigley Jr. Co. The company announced plans to sell the team in 2007, but the recession and credit market collapse hindered that plan.

Tribune has agreed to sell a 95 percent stake to the Ricketts family in a deal that tops the record $600 million paid for the Boston Red Sox and its related properties in 2002. Tribune will keep the remaining five percent.

The sale has been approved by the other MLB owners.

The Cubs are not the first baseball team to file for bankruptcy. In 1993, the Baltimore Orioles were sold after owner Eli Jacobs filed for Chapter 11. In 1969, the same happened to the Seattle Pilots, whose new owners moved the team to Milwaukee and changed the name to the Brewers.

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Bankruptcy Judge Okays Sale Of Chicago Sun-Times

On October 8, 2009, a US Bankruptcy Judge approved the sale of the Chicago Sun-Times to a group of local investors, securing the newspaper's continued existence. James Tyree, chief executive of Mesirow Financial, will take over control of the Sun-Times Media Group, which includes both the Chicago Sun-Times as well as over fifty other newspapers and news websites in Illinois. Tyree will also become responsible for about $20 million in the papers' remaining debt.

The sale was for $5 million. The sale involving Tyree and a handful of other Illinois investors has been in talks for several weeks as employees of the Sun-Times worked through contract changes and other compromises from union leaders. The concessions made by union members would include significant pay cuts for many working for the troubled media group.

"We are confident that they will vote in favor of this deal by the end of this week," the Sun-Times attorney told Judge Christopher Sontchi at Thursday's hearing.

Both the Sun-Times and the Chicago Tribune have filed for bankruptcy protection in the last year - making both of Illinois' major print papers struggling to get back on to their feet. Many print newspapers are hurting currently, due both to hard financial times and due to dropping advertising revenue as many companies are pouring money into online marketing. The newspaper was also struck by scandal in 2007 when former CEO Lord Conrad Black was accused of taking millions of dollars from the company.

The Chicago Sun-Times has published a paper since 1844. At the time of bankruptcy, the Sun-Times declared $801 million in debt and $479 million in assets.

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Illinois To Crack Down On Predatory Debt Settlement Companies

Especially in times of economic hardship, a number of debt settlement companies will try to take advantage of those desperate for help. Now the Illinois state treasurer will seek better regulation regarding predatory debt settlement companies in his state.

Alexi Giannoulias said on Monday that many debt settlement companies do not help their customers reduce their debt. Not only that but that these unfair and predatory companies will also ask their customers to stop paying their bills and instead pay debt settlement fees. His speech was not only a warning to consumers to closely examine any debt settlement company they are thinking of using, but also to say that he plans on further regulating the companies in Illinois to protect consumers against scams.

Among the proposed regulations, Giannoulias would like to require state licensing of valid debt settlement companies, prevent the companies from suggesting that customers stop paying their bills, and prevent the companies from collecting more than $80 a month from their customers. The $80 would consist of a $50 upfront fee and $30 a month in continuing costs.

In many cases, those struggling with large amounts of debt often turn to debt settlement companies instead of seeking alternate means of paying off debts or declaring bankruptcy. However, many who turn to unscrupulous debt settlement companies end up damaging their credit scores even further - without escaping from their financial problems.

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Chrysler Moves Assets in Bankruptcy

According to a report filed on September 20, the old assets of Chrysler LLC remaining in bankruptcy lost $12.1 billion in three months.

The report, which was filed in Manhattan bankruptcy court, shows a net loss of $344 million for the month ending July 31. Revenue of just $2 million was outweighed by $235 million in reorganization costs as the company, now known as Old Carco LLC, winds down what remains of its assets after a sale.

On April 30, Chrysler filed for bankruptcy protection and sold essentially all of its assets to a group led by Italy’s Fiat SpA in June, creating the world’s sixth-largest automaker.

According to attorneys for the bankrupt estate, “these entities are no longer engaged in any significant operations. The papers the attorneys filed with that statement were signed by Chief Executive Officer Ronald E. Kolka.

According to the company, the Fiat transaction caused debtors to lose $12.08 billion. The company added that it continues revising the loss amount recorded as of the transaction closing date of June 10.

The operating report said that cost of sales was $11 million in July, and loss before reorganization costs was $20 million. Total current assets are $2.28 billion, and total current liabilities are $3.86 billion.

In the three months since filing for bankruptcy, Chrysler has also seen a $600 million gain from a settlement with the Pension Benefit Guarantee Corp. from June 5, under which Daimler agreed to assume the $600 million obligation owed by Chrysler.

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Office Depot Sued During Bankruptcy Filing

A former supplier has filed suit against Office Depot for $217, claiming that the company breached its contract in order to obtain supplies without paying. The supplier says the breach was a factor in its bankruptcy filing.

According to the complaint, which was filed in U.S. Bankruptcy Court in Nashville, Tennessee, the Boca Raton, Florida-based Office Depot “engaged in a cynical effort to defraud a long-time, loyal vendor through a pattern of deception.”

Nukote International, the Plano, Texas-based supplier that filed the claim, filed for bankruptcy earlier this year. The suit claims Office Depot’s breach of contract was partially responsible for the bankruptcy.

The complaint says that between late 2008 and May 2009, Office Depot created a scheme to fraudulently obtain Nukote’s most profitable product, private brand imaging supplies, with the smallest possible cash outlay.

The suit says that after being dropped as an Office Depot vendor, Nukote’s cash flow and borrowing capacity saw a dramatic decrease, resulting in the company being forced to enter Chapter 11 bankruptcy.

Office Depot denied the claims, saying that Nukote had been “significantly past due” on money owed to the company and that Office Depot “still holds a significant balance” from Nukote.

Office Depot claims that in April, Nukote ceased to ship its products, resulting in Office Depot being left short on stock and forced to find another vendor.

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Increase in Foreclosure Rescue Scams

With foreclosure filings on the rise in Kansas City, housing counselors warn that there is also an increase in foreclosure rescue scams.

This is the simplest advice to avoid being ripped off: Never send your mortgage payment or any payment concerning your loan to anyone other than your mortgage lender.

You could receive a letter promising hope to homeowners facing foreclosure. It says that the company can renegotiate your mortgage and that cash-strapped borrowers won’t have to pay as much as they now owe.

However, when one woman, Marjorie Major, contacted one such company in Florida, she learned that she would be required to pay upfront fees ranging from $1,000 to $5,000. The practice of charging upfront for foreclosure relief is illegal in several states, including both Kansas and Missouri.

Legitimate federally-certified housing counselors say that desperate homeowners continued to be lured into these scams, despite warnings to the contrary.

Here are a few tips for avoiding scams:

- Never use any ad, person, or company that approaches you claiming to be able to “stop foreclosure now” for a fee.
- Never divulge financial information online or over the phone to a company you know nothing about.
- Never send your mortgage payment, or any payment, to a company other than your mortgage lender.
- Contact your mortgage lender. Despite what a scammer will say, you should contact your lender when you have trouble making monthly payments.
- If you suspect you have been approached or victimized by a scammer, contact your local Better Business Bureau, a state attorney general’s office, and/or the Federal Trade Commission.

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Herbst Gaming Inc. Plan to Exit Bankruptcy Criticized

According to a report from the Las Vegas Sun, key creditors and lenders that are owed hundreds of millions of dollars have harshly criticized a plan for Herbst Gaming Inc. to exit bankruptcy.

According to the critics, Herbst and its subsidiaries involved in the bankruptcy case engaged in dubious casino acquisition deals that overwhelmed the company with debt, along with improperly placing the interests of senior lenders ahead of junior lenders and other creditors.

Earlier this year, Herbst Gaming filed for Chapter 11 bankruptcy. The company runs a route business that owns and operates over 6,800 gaming machines in grocery stores, drug stores, convenience stores, bars, and restaurants across Nevada. The company also runs a casino business that owns and operates 12 casinos in Nevada, two in Missouri, and one in Iowa, employing a total of 5,400 people. The gaming division is a sister company to the more than 100-unit Terrible Herbst convenience stores, also based in Las Vegas.

In a July filing with the court, the unsecured creditors claim that Herbst, which is controlled by the Herbst family, was harmed by a pattern of breaches of fiduciary duty, misconduct, and mismanagement by the debtors’ officers and directors, and involved excessive salaries to Herbst officers and improper deals involving Terrible Herbst.

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Irwin Financial Corp Files Liquidation Bankrutpcy

Irwin Financial Corp. has filed a liquidation bankruptcy after federal and state regulators seized the company’s main banking assets on September 18.

The Columbus, Indiana-based financial holding company filed for Chapter 7 bankruptcy in federal court in Indianapolis, listing assets of $10 million to $50 million and debts of more than $100 million.

According to the publicly traded company, it is not expecting to receive any recovery upon completion of the receivership and conservatorship process with its seized banks.

Irwin Union Bank and Trust, based out of Columbus, and a smaller savings and loan based out of Louisville have been placed under the receivership of the Federal Deposit Insurance Corp. and assets were sold to Ohio-based First Financial Corp., which has taken over all of the bank’s branches and assumed control of deposits.

The government’s takeover of the banks, on the grounds of insolvency, leaves little to no assets remaining under the holding company, essentially eradicating the company’s value for shareholders and bondholders.

According to Irwin Financial, it has outstanding debentures of $234 million, which are due and payable to holders due to the bank takeover. However, very little money apparently exists to pay them.

According to the government, the cost to its public Deposit Insurance Fund from the company’s failure could reach $850 million.

This marks the first failure of a bank in Indiana during the current economic recession.

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Chicago Bankruptcies Still On Rise – With No End In Sight

Despite some signs that the recession is coming to the end, personal Chicago bankruptcies are still on the rise - with a 38% increase in individual bankruptcy filings from this September in comparison to last September.

Bankruptcy experts and economists say the trend will continue as jobless rates rise and as many still struggle with mortgage payments. Bankruptcy filings in 2009 have more than doubled since 2006.

In Chicago, Illinois, alone, 4,302 new bankruptcy petitions were filed, compared with just over 1,500 filed in 2006 and 3,121 last year. While the number of Chapter 7 liquidation bankruptcies increased dramatically, the number of Chapter 13 reorganization bankruptcies decreased somewhat. Many believe that this is because most lost jobs mean fewer wage-earner bankruptcies.

The numbers also looked bad for corporations and Chapter 11 bankruptcy, with numbers steadily increasing. In fact, this September's Chapter 11 filings doubled in comparison to last year's, with 34 businesses seeking bankruptcy protection. This, too, may be a red flag that the economy is still weak in the wake of last year's financial crisis.

The last time that bankruptcy filings were this high was in 2005, just before the bankruptcy laws changed, making it harder to declare bankruptcy. While many feel that the reason that bankruptcy rates continue to climb is extremely complex and even impossible to fully understand, the majority of experts agree that the rising bankruptcy rates will not taper off any time in the near future.

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10 Ways Sports Stars Ruin Their Finances

The Business Insider recently compiled a list of the 10 ways sports stars ruin their finances and end up in bankruptcy and/or foreclosure.

- Ponzi Schemes: For some reason, professional athletes seem to be especially susceptible to these schemes. Here are a few recent examples:

A woman who once advised Michael Vick and several other football players has been charged by federal prosecutors with the theft of $3 million from eight victims in a Ponzi scheme, according to the Associated Press. Vick, who recently entered bankruptcy, is filing suit against the woman to recover $2 million.

The Washington Times reported that MLB stars Greg Maddux, Bernie Williams, Johnny Damon, J.D. Drew, Andruw Jones, Carlos Pena, and several other current and former players invested with Allen Stanford.

There are seven former and current NFL players listed among the 3,000 investors who were allegedly fooled into investing $100 million in a Canadian-based Ponzi-type scheme – a pyramid allegedly run by two men who had prior encounters with the law, according to reports from the Vancouver Sun.

- Bad Investments: It could be due to tangible business ventures being more fun than stocks and bonds. However, due to most athletes having very little business background, they have made some terrible investments. Here are some examples Sports Illustrated has provided:

In May of 2007, Drew Bledsoe, Rick Mirer, and five other NFL retirees invested at least $100,000 each in a now-defunct start-up company called Pay By Touch, which said that its “biometric authentication” technology would help replace credit cards with fingerprints, despite the company being wracked by lawsuits and internal dissent.

Rocket Ismail squandered a great deal of money funding various projects, including an inspirational movie, the music label COZ Records, a cosmetics procedure in which oxygen was absorbed into the skin, a plan for nationwide phone-card dispensers, a Rock N’ Roll Café theme restaurant in New England, and three shops called It’s in the Name, in which tourists could purchase calligraphy of names and proverbs.

Michael Vick put $6 million in bank loans towards a car-rental franchise in Indiana, real estate in Canada, and a wine shop in Georgia.

- Divorce – Divorces have proved costly for many people, but they especially seem to hit pro athletes hard. According to the New York Times, polls, studies, and anecdotal evidence show high divorce rates for professional athletes. The report included reasons such as infidelity, women targeting athletes, trophy wives, lifestyles not suited for marriage, and entourages that discourage intimacy. In one example, PGA legend Greg Norman’s 2008 divorce cost him $103 million, according to the Associated Press.

- Attempting To Run A Business – Not every athlete can be like Magic Johnson, who has found success with his urban development company Magic Johnson Enterprises. In fact, the majority of athletes who attempt to run their own business are met with poor results.

Sports Illustrated recently listed the examples of Saints all-time leading rusher Deuce McAllister, whose Jackson, Mississippi car dealership went into bankruptcy and Panthers receiver Muhsin Muhammad, who put his Charlotte, N.C. mansion up for sale on eBay a month after Wachovia Bank filed suit against his entertainment company for overdue credit-card payments.

The most noticeable example in recent history is former MLB All-Star Lenny Dykstra, who was forced to sleep in his car after his magazine, The Player’s Club, proved to be a miserable failure. He filed for bankruptcy in July, reportedly owing between $10 million and $50 million.

- Drug Abuse – In some cases, lots of money leads to lots of partying. In particular, drugs can spell bad news for athletes. Here are some examples:

According to Maxim, Texas Rangers star Josh Hamilton began his career by burning through a signing bonus of $4 million by doing coke and crack and drinking a bottle of Crown Royal a day.

NBA player Chris “Birdman” Andersen spent a great deal of the $289,000 signing bonus in 2001 by partying. In 2006, he was kicked out of the NBA for two years for unspecified drug use and lost his $3.5 million per year salary, according to ESPN.

In 2004, NFL star Ricky Williams lost millions in salary when he left the league after failing multiple drug tests due to marijuana use. He was also forced to pay $8.6 million for breach of contract upon his departure and when he returned in 2006, he still had to serve a 1-year suspension.

- Having Too Many Children – Everyone has the right to have as many kids as they wish. However, not all athletes are responsible parents. Some of them even have multiple children with multiple women. In simple terms, that costs a lot.

One example is former NFL player Travis Henry. According to a recent report in the New York Times, the 30-year-old former running back has nine children, each from a different mother, some born as closely as a few months apart. Henry says that he’s broke and is unable to pay the estimated $170,000 per year he owes in child support.

According to the Atlanta Journal-Constitution, former boxing champion Evander Holyfield has grossed more than $248, but nearly lost his Atlanta, Georgia home due to child support payments believed to total $500,000. That comes in addition to two divorces and multiple failed business endeavors.

- Using The Wrong Advisors – Many players know they need financial help, but choose the wrong people to provide that help.

Whether it was friends from home or predatory scammers, the NFL Players Association says that between 1999 and 2002, at least 78 players lost a total of over $42 million due to trusting financial advisors with questionable backgrounds.

Sports Illustrated listed some examples of such advisors, such as Luigi DiFonzo, a former felon who defrauded such players as Hall of Fame running back Eric Dickerson by claiming to be an Italian count before committing suicide in August 2000. Another example was William “Tank” Black, a disgraced agent who built up a pyramid scheme that took nearly $15 million from at least a dozen players. Another was Kirk Wright, a hedge fund manager convicted of 47 counts of fraud and money laundering for a scheme involving more than $150 million. He had a client list that included at least eight NFL players. He committed suicide in prison.

- Investing Too Much In Real Estate – This seems to be one of the biggest things players put too much money into.

Former Morgan Stanley senior vice president Ed Butowsky told Sports Illustrated that the number one problem for athletes in terms of financial meltdown was “chronic overallocation into real estate and bad private equity.” Butowsky said athletes came to him about these deals more so than anyone else.

CNBC says some stars faced with foreclosure after the housing market collapse include NBA players Latrell Sprewell and Vin Baker and MLB star Jose Canseco.

- Dog Fighting – Spending 18 months in prison for fighting and killing dogs wasn’t the only consequence for Michael Vick’s actions. He also went broke.

In addition to the millions he lost in salary, Vick also spent a great deal of money on legal fees, fines, and supporting family and friends, according to The Smoking Gun. Recently, a judge approved a plan for Vick to repay creditors $20 million after he filed for bankruptcy.

- Stupidity – This seems like an obvious cause of financial woes: acting dumb.

Some recent memorable moronic decisions include Michael Vick’s dog fighting, Plaxico Burress 2-year prison sentence for illegal gun possession and shooting himself at a New York night club  in November right after signing a 5-year, $35 million contract, Adam “Pacman” Jones’ multiple run-ins with the law, including his infamous involvement in a brawl and shooting at a strip club, and Michael Phelps being caught smoking a bong, resulting in the loss of his endorsement deal with Kellogg’s and financial support from USA Swimming.
 
Global Gaming Factory, the company seeking to purchase embattled file-sharing hub The Pirate Bay, is now faced with a claim from a creditor that could force the company to file for bankruptcy protection, according to a report in Sweden’s The Local.

According to a court filing from Advatar Systems, Global Gaming has owed them more than $200,000 since July 25. The filing from Advatar Systems managing director Johan Sellstrom, a former member of the board of Global Gaming Factory, says that Global Gaming Factory is unable to legally pay its debts and “this incapacity can not be regarded as temporary.”

This is not the first obstacle Global Gaming Factory has faced will attempting to acquire The Pirate Bay for $7.8 million and turn it into a legitimate site that pays artists and copyright holders.

On August 21, trading in Global Gaming Factory shares was halted, and the company was recently delisted from the exchange.

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What Companies Have the Highest Likelihood of Filing Bankruptcy This Year?

A recent report from Audit Integrity has identified some high-profile names with the highest likelihood of filing for bankruptcy protection among publicly traded firms.

This is a list of the ten companies that appear to be the worst off:

1. Hertz – With a great deal of debt financing the auto rental company’s fleet of vehicles, decreasing rental demand does a great deal of damage. The company got some breathing room in May by raising new capital, but Fitch and Moody’s actually cut their ratings for the company in July. Currently, the company’s shares have seen a rally and are more than five times the low of $2 in March.

2. Textron – In the current financial climate, selling business jets is not an easy endeavor. The company said it had a backlog of $2.3 billion this year after canceling a new jet design and seeing severely decreased demand for its other aircraft-related offerings. The company has been able to push back some debt maturities, but the company’s leasing arm has seen a decline in credit quality.

3. Sprint Nextel – The cell phone providers could see a loss of as many as 4.4 million post-paid subscribers during 2009. The problem is made worse by the fact that the company has large amounts of maturing debt over the next few years. Rumors of Deutsche Telekom acquiring the company sparked some hope, but that seems to have faded.

4. Macy’s – Department stores in general seem to have seen a decline. Macy’s will likely continue to see a decline in same store sales. The company has $2.4 billion of maturing debt over the next five years and is attempting to cut costs and has already reduced its dividend.

5. Mylan – Mylan greatly overpaid when it purchased Merck’s generic business in 2007 and the company is now saddled with $5 billion of long-term debt as a result. Between 2007 and 2008, the company saw a loss of more than $1.3 billion, which had a great deal to do with goodwill write-downs. The company could earn $300 million in 2009, but will have to earn much more in the future for its debt to become manageable.

6. Goodyear – Goodyear tires have seen a dramatic decline in demand and the company has a great deal of debt and pension obligations. Further compounding matters is the company’s inability to have proper cost control due to factories being forced to stay open by the United Steelworkers union.

7. CBS – Weak advertising and decreasing license fees have caused the network to see a dramatic decrease in earnings this year. If the trend continues, the company could find it difficult to refinance $3.2 billion of debt coming due over the next five years. It really depends on whether or not the earnings collapse is simply cyclical, or caused by a structural trend in which traditional TV is dying.

8. Advanced Micro Devices – The question of whether or not AMD will ever see a profit again becomes increasingly important each day, as it carries more than $5 billion in long-term debt. The company lost nearly $3 billion between 2007 and 2008 and analysts predict more losses to come in 2009 and 2010. The company’s shares rallied from their February $2 low, but seem to be stuck in a long-term down trend from $40 highs in 2006.

9. Las Vegas Sands – Over the past several years, Las Vegas Sands has over-expanded and over-levered and is now faced with more than $10 billion in debt. Despite now being 13 times their March low, the company’s shares still have an uphill battle. Las Vegas conditions are terrible, Asian expansion is insufficient, and if this trend continues for too long, LVS will find itself in bankruptcy court seeming as if it bit off more than it could chew.

10. Interpublic Group – IPG is one of the largest advertising and marketing companies in the world and has seen a large impact from the global recession. The company’s CEO recently noted that the economic downturn is “proving steeper and more lasting than expected.” The company’s revenues have seen double digit declines and the company’s exposure to General Motors as its largest client hasn’t helped.

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Falling Gas Prices Lead Natural Gas Company to Bankruptcy

On September 10, PNG Ventures Inc. filed for Chapter 11 bankruptcy protection in a Delaware bankruptcy court, making it the second liquefied natural gas company to file within the same week. The pressure to file is believed to be due to falling gas prices.

In the company’s filing, it said that it was confronted with losses from operations and default under a $36.3 million secured credit facility.

Due to bearish domestic fundamentals, natural gas prices have been forced into 7-1/2-year lows. However, crude, which is more heavily impacted by international factors, has been bolstered during 2009 by increased economic optimism.

Earlier in the week, on September 8, Trident Resources Corp. and its affiliates filed for Chapter 11 bankruptcy, citing similar reasons.

In PNG Ventures’ filing, the company listed assets of approximately $40 million and debt of approximately $44.6 million. The company’s filing also included five affiliates.

 

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Chicago’s Bankrupt Sun-Times Likely To Continue Under New Management

After the Sun-Times Media Group petitioned for bankruptcy in March of this year, many were concerned about whether or not the paper would continue and, if so, how. Now, six months later, the Chicago Sun-Times is out of bankruptcy and making plans for continuing to print the city's paper. The second-largest print paper in Chicago will be under new leadership but still retain Jeremy Halbreich as its chairman.

Halbreich has said that Chicago can and will be a two-newspaper town, and that both the Sun-Times and the Chicago Tribune can thrive together, since each publication is very different from the other and that each paper has different audiences. In an interview Wednesday, the chairman said that the Sun-Times was the heart and soul of the Chicago people, while the Chicago Tribune was a drier, more official paper of record.

The media group not only consists of the Sun-Times, but also 57 other local or regional newspapers. The group of Illinois newspapers was purchased by Chicago businessman James along with a small group of investors. The papers are still losing money under new management, but cutbacks are slowing the financial troubles for now. The paper hopes to take in a positive cash flow by the end of the year, even while paying for expenses related to its bankruptcy.

One new strategy the Sun-Times is considering in the wake of its bankruptcy is cutting back the number of issues in smaller suburban daily papers - some of which are circulated quite close to one another.

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August Foreclosure Rates Fall

According to a report from RealtyTrac released on September 10, the rate of home foreclosures in Missouri continued falling in August, in comparison to August 2008, while the rate increased in Kansas.

In August, the total number of Missouri properties with foreclosure filings saw a decrease of 33.5 percent from August of last year, placing the state 31st in the U.S. in terms of foreclosure activity. The total number of properties facing action was 2,498.

RealtyTrac’s stats also showed that the rate was a 21 percent decrease from July.

The number of properties in Kansas faced with foreclosure saw an increase of 45.7 percent from August of last year to August of this year. The state ranked 35th in the U.S. with 1,056 properties in foreclosure.

The number of foreclosures in Kansas may have been higher than in the previous year, but that total was 19.94 percent lower than it was in July.

RealtyTrac’s nationwide stats showed that foreclosure activity was essentially flat in August from July; however, it was still an increase of 18 percent from August 2008.

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Missouri Auto Industry Struggles After GM Bankruptcy Reorganization

What happens when a company as big as GM declares bankruptcy? In many ways, it affects all of us - and even the government. In smaller ways, it can hurt the local auto industry in significant ways. In the case of Missouri, a recent report conducted by the Missouri Automotive Jobs Taskforce has revealed that over the last five years the state has lost 60 percent of its car production and 35 percent of its workforce.

Missouri Governor Jay Nixon was formed and commissioned to file this report in January as a way to better understand Missouri's auto industry and hopefully attract more auto industry jobs. Indeed, the group recommended that Missouri needs to create an environment that is conducive to auto industry needs, such as a "Missouri Center of Automotive Excellence" that would coordinate all state programs and policies related to the auto industry.

However, Missouri also wants to move forward with caution, especially considering the recent GM and Chrysler bankruptcies badly harmed states with economies based in the auto industry. Specifically, the group reported on the affects of the failing auto industry on bigger car-based cities like Detroit, which has perhaps suffered from the hard economic times more than any other metro area. Nonetheless, despite these recent bankruptcies, Missouri wants to continue to be a leading player in the auto industry and make future policies and decision that would attract even more industry jobs.

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Foreclosure Prevention Efforts Doing Better

The Obama administration has put $75 Billion into a foreclosure-prevention program that seems to be making progress. The program is based on a lender-borrower incentive program that has included more than 570,000 trial modifications with a reported 360,000 modifications still in the works.

However, America is still seeing an increase in mortgage defaults with nearly one of every 12 borrowers delinquent on their mortgage. The program also relies on the big banks, Chase, Citigroup, Wells, and Bank of America, to do their part. They are only offering the trial modifications to a small amount of their mortgagees—25% at best.

America will be watching the credit and banking industries as the plan continues on throughout the country.

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Ethanol Maker VeraSun Sells Property After October Bankruptcy

After struggling with the rising prices in corn, the main ingredient in making ethanol, the largest publicly traded ethanol company declared bankruptcy in October of 2008. VeraSun  filed for Chapter 11 bankruptcy on Oct. 31, after eight years of business, affecting 17 ethanol plants and many workers, including those in the states of Illinois and Missouri.

Now the St. Louis Business Journal reports that VeraSun Energy Corp. has sold 1,600 acres of farmland for $10.5 million in order to fulfill what is outlined in their bankruptcy agreement. Sale manager Schrader Real Estate and Auction Co. Inc. of Columbia City, Ind., did not say who the buyers of the farmland were.

The land involved with the sales included 380 acres in Granite City, which sold for $2.9 million. The land was sold to a local family farmer, thought it was not said who. In Litchfiled, 487 acres of farmland were sold near St. Louis for $3.3 million to three different buyers. The land was also close to I-55. In Danville, Illinois, 733 acres sold for $4.3 million, bought by a neighboring landowner looking to expand their holdings. Those buying the land were a mix of farmers and future investors. Some of the land was located in Madison County and Vermilion County.

Also recently, five plants owned by VeraSun were sold to their producers.

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Bankruptcy Filings for Wealthy Families on the Increase

Wealthy families’ bankruptcy filings rose 73% according to the National Bankruptcy Research Center. The increase in filings is due to a failing real estate market that has left many individuals unable to use a loan modification or move their assets. Many have found themselves upside down in their mortgage and facing a possible foreclosure.

It seems that the risk of moving all of their money into investments has left these individuals with little to fall back on. From July 2008 to July 2009, sales of homes with a sale value of between $1 million and $2 million decreased 23%.

Perhaps America has further evidence that the recession has humbled everyone—and bankruptcy has been there to help every step of the way.

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Bankruptcy Up 22% In August From 2008

If you are thinking about declaring bankruptcy, you are certainly not alone. The national bankruptcy statistics have been released for August, and rates are up again from last year. The Automated Access to Court Electronic Records show that consumer bankruptcy rates are up by 22 percent in August of 2009, as compared with bankruptcy rates from August of 2008. There were 954,911 bankruptcy filings in August of this year, compared to 703,732 in August of last year.

Robert Lawless, a professor of law at the University of Illinois, predicts that 1.45 million individuals will file for bankruptcy this year, numbers that have not been seen since the bankruptcy reform that took place in 2005.

The reasons for the significant increase in bankruptcy filings continue to be tied to the weak economy and the housing crisis. More than anything else, job loss, layoffs, and the loss of regular income has lead to a growing number of those petitioning for bankruptcy, although other common reasons still include divorce, medical emergencies, failed business ventures, and other unexpected events. Job loss can also lead to the loss of health insurance - a loss that could lead to bankruptcy in the event of a medical emergency. Still, the states suffering from the highest numbers of bankruptcies are also the states suffering the worst housing issues.

Lawless expects that bankruptcy filings will continue to be high even after the economy continues to improve.

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Annie Leibovitz: Is Bankruptcy An Option?

When is bankruptcy the best option? Currently, some are wondering if it might not be the best option for famed celebrity photographer Annie Leibovitz, who has been plagued with a number of stressful and public financial problems.

Leibovitz has been known for her stunning portrait photos for decades, including cover shots for Rolling Stone, Vanity Fair and Vogue magazines. However, she has been faced with a lawsuit involving possible copyright infringement and has also lives an extravagant lifestyle, with at least four expensive properties in her name, including three in Manhattan. Having two children later in life using a variety of non-traditional fertilization techniques might have also added to her debt, while the recent recession surely hurt her portfolio.

Recently, Leibovitz has defaulted on a loan for $24 million from Art Capital, putting her entire art collection and her estates at stake. Many are wondering, should Annie Leibovitz choose bankruptcy? According to Gawker, her creditors could take control of her $50 million photo archive, her homes in Rhinebeck, N.Y., her home in Greenwich Village, as well as 12 percent interest on the loan and 25 percent commission on the sale of the archive. And - Leibovitz's creditors may be able to file for involuntary bankruptcy.

For now, lending agency Art Capital and Leibovitz have decided to extend the life of the loan and give Leibovitz another chance to do well by her loan, saying that they have decided on the "withdrawal of the suit... filed against Ms Leibovitz on July 29, 2009 and extends the maturity date for the 24 million dollar loan."

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Historic New York Restaurant Files for Bankruptcy

Historic New York restaurant Tavern on the Green, which is considered a Central park landmark, has filed for Chapter 11 bankruptcy protection.

The 75-year-old restaurant’s filing comes just four months before the license is to be handed over to a new operator.

Jennifer Oz LeRoy, chief executive for the restaurant, blames the filing on the current economic conditions and the decision of New York City to give the license to another operator.

The new license is to be handed over to Dean J. Poll, who runs the Central Park Boathouse restaurant.

A total of 20 creditors are listed in the federal bankruptcy filing.

Poll, who will take control of the restaurant on January 1, plans to renovate with green technology. Originally, the restaurant building, which dates back to the 19th century, housed sheep.

LeRoy’s father, Warner LeRoy, took over the restaurant in 1976. He died in 2001.

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Samsonite Co. Stores Luggage Maker Filing for Bankruptcy

Samsonite Co. Stores has started on its path to bankruptcy protection. They currently have $233 million in assets and $1.5 billion in debts. The court papers show a reported $920,301 owed to 20 of the largest creditors.

The parent company, Samsonite Corp, is bringing in less in revenue than the store unit owes in debts. Their revenue for 2007 was $1.07 billion. Samsonite Corp, however is not filing for bankruptcy protection.

According to their chief financial officer, the decline in sales has been attributed to the economy. The recession has caused a slow in travelers and, thusly, a decline in the need for luggage and travel items.

Samsonite has been guaranteed a 105% recovery of the value of the merchandise that has yet to be sold.

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Michael Vick's Bankruptcy Plan is Approved

Michael Vick’s bankruptcy plan for him to repay his creditors $20 million has been approved. The bankruptcy had come as a result of years of overspending with no budgeting. With his Chapter 11, he must retain a financial planner to help him with his finances.

Vick said he was relieved to be able to start his life again. He seemed pleased with his counsel, the courtroom, and the outcome. Everyone in the court room also seemed confident that Vick would be able to keep up with his payments and not find himself in financial trouble again.

Vick is one of a number of celebrity cases of bankruptcy. This case, like the others, just proves that regardless of your stage in life, operating without a clear idea of your finances and your budget can lead you to financial disaster.

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Crestwood Developer Responsible for Over 15 Foreclosures

Joseph Baumeister, the owner of a Crestwood development company, was sentenced to jail after pleading guilty to bank fraud. He confessed to using straw purchasers and false information to collect homes and commit mortgage fraud.

From January 2007 to October 2008, Baumeister bought 16 homes under false pretenses. His company, Prophet Development, used inflated prices and fibbed about improvements on homes in order to charge buyers more money—and he put the extra money right in his pocket.

He was sentenced to 37 months in federal prison. He also has to repay $364,504 of the debt that he owes.

Crestwood Development Company Owner Gets Caught Committing Fraud

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Charter Continues through November with Bankruptcy Plan

Charter Communications Inc filed for Chapter 11 bankruptcy protection back in March with plans to emerge from the proceedings in late August or early September. It seems that Charter will continue to control its own bankruptcy until November 22nd after a controversy called for an extension in their reorganization plan.

Charter, a St. Louis based company, will continue under the oversight of their turnaround specialist and adviser but must come to a conclusion that is approved by its principal lender, JP Morgan Chase. The bankruptcy was filed in an attempt to cut $8 billion out of a $21 billion debt.

When asked for any comments, Charter only had positive things to say about the restructuring. The bankruptcy is regarded as good news and an opportunity to be everything that they can be for their customers, which is further evidence that the common conceptions about bankruptcy turn out to be untrue. There are also continuing employee benefits and customer discount programs in an attempt to maintain their business motto.

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Foreclosures Are Declining In Parts of Missouri Despite a National Increase

According to a report from RealtyTrac, foreclosure filings continue across Christian County, Missouri, but are not as prominent as they were in 2008.

For the first half of 2009, there were 79 foreclosure filings in the county, which is a decrease of 28 percent from the 100 the county had during the same period in 2008.

That accounted for one filing out of every 375 households in the county, which ranked it 11th in Missouri for foreclosures.

Across the entire state of Missouri, foreclosures saw a decrease of 17 percent at 13,880 for the first half of 2009, in comparison to the first six months of 2008, in which there were 17,594 filings. Nationally, filings saw an increase of nine percent from 2008.

While foreclosures may be down, short sales are increasing. See our blog for more information and to post your opinion.

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Kansas City Man's Golf Club Sold in Foreclosure

Quintero Golf & Country Club in Phoenix, Arizona’s West Valley, the dream development of Gary McClung, a businessman from Kansas City, Missouri, is scheduled to be sold in a foreclosure auction on October 7.

In 2001, McClung and his wife, Leona, entered the golf scene in West Valley with the completion of a Rees Jones-designed golf course. By 2002, they were working closely with golf legend Greg Norman to build a second course and had sold more than 200 invitation-only memberships and a few dozen lots priced up to $2 million.

McClung, who had been the president of Midway Ford/Sterling Truck Center in Kansas City, the largest Ford truck dealership in the U.S., said in 2006 that he and his wife had created the 828-acre Quintero in celebration of their financial success and love for golf. They recruited colleagues from Ford and friends from the Midwest to help them.

The endeavor seemed to be heading in the right direction. Travel & Leisure magazine named Quintero one of the Top 100 Golf Course Communities and Golfweek magazine named it one of the Top 100 Resident Courses. McClung had been named to an exclusive advisory committee of the Environmental Institute for Golf, alongside such professional golfers as Sergio Garcia, Greg Norman, and Vijay Singh.

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Smurfit-Stone Container Corp Files Chapter 11, Closes Plants

According to a report in the Hartford Courant newspaper, under its Chapter 11 bankruptcy filing, packaging company Smurfit-Stone Container Corp. plans to close box making plants in Portland, Connecticut, St. Joseph, Missouri, and Mansfield, Ohio.

The report said that employees had already been informed of the planned closing. Currently, the plan is for the Portland plant to close in September with the work transferred to a Mansfield, Massachusetts plant. The employees of the closing plants will receive severance.

The company filed for Chapter 11 bankruptcy protection in January of this year.

Smurfit-Stone is a mainly St. Louis-based manufacturer of corrugated container and containerboard that operates facilities for recycling corrugated containers, folding cartons, and recovered paper in the St. Louis area.

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Kansas City Personal Bankruptcies Jump 25 Percent, Missouri 22 Percent

Across the country in July bankruptcy filings skyrocketed an unbelievable 34 percent - but how are Missouri and Kansas City faring in these difficult financial times as far as personal bankruptcies are concerned? The answer is: better, but not that much better. According to the Kansas City Star and kansascity.com, personal bankruptcy filing rates have increased 25 percent in Kansas City and the surrounding Missouri area.

In the last eight months in the Western District of Missouri there were 7,539 bankruptcy filings compared with 6,179 during the same period last year - and increase of 22 percent.

The last time that bankruptcy rates have been so high in Kansas City and in Missouri was just before the bankruptcy reforms four years ago and the implementation of the Bankruptcy Abuse Prevention and Consumer Act in October 2005. Economists blame a few different current events for the surge in Chapter 7 and Chapter 13 personal bankruptcy filings, including the recent recession and economic crisis, the housing crisis and the rise in foreclosures, the increasing number of upside-down mortgages, the average American's increasing amount of debt, the rising rate of unemployment, and the consumer's general lack of confidence.

Nationwide, according to the American Bankruptcy Institute, consumer filings numbered 126,434 in July, an 8.7 percent increase since June and a 34 percent increase in comparison to July of 2008. It is also interesting to note a disproportionate number of individuals filing for Chapter 7 liquidation bankruptcy in comparison to Chapter 13 reorganization bankruptcy.

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Missouri-based Spectrum Brands Exits Bankruptcy

In February of 2009, company Spectrum Brands petitioned for Chapter 11 bankruptcy following a missed loan payment that amounted to $24 million. The troubled company, which makes Remington shavers, pet supplies, personal products, lawn care products, and batteries as well as a number of other consumer products, declared just over $10 billion in assets and $4.4 million in debts. The company blamed the ongoing global recession on their money woes and decision to file bankruptcy.

"Our businesses have attractive growth prospects that have been encumbered by the level of debt the parent company is carrying," said Spectrum Chief Executive Kent Hussey. "After careful consideration, we decided that the approach announced today would be the most effective and expedient path for us."

Now, however, just eight months later, the company that has operations in Overland, Missouri, and Bridgeton, Missouri, is exiting bankruptcy. The exit was aided by $242 million from a number of banks and financial institutions including GE Capital, who helped the troubled company meet the closing demands of their bankruptcy reorganization plan.

The company will issues an estimated three million shares of a new common stock to debtors-in-possession, while another 27 million shares of new stock will be traded on the Pink Sheets. Its former shareholders will get nothing from the bankruptcy reorganization and its former common shares will be canceled.  

Spectrum told reporters that it eliminated $840 million of subordinated debt in the Chapter 11 reorganization, and exits with substantially improved capital structure.

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Eastern Missouri Developer Made Responsible for Foreclosures

A real estate developer from eastern Missouri convicted of mail and bank fraud has been ordered to pay $34 million to more than 100 people, some of whom had their homes go into foreclosure.

The order was part of the sentence handed down in federal court on August 6 against 47-year-old O’Fallon, Missouri resident Robert Hartmann, who also received a sentence of two years in prison.

In 2005, Hartmann’s real estate business collapsed, causing banks and investors to be left with properties in the St. Louis area that never got redeveloped or went into foreclosure.

According to the prosecution, Hartmann claimed he would aid one woman with keeping her home, but instead he increased the loans on the woman’s property. He required that she pay him in a rent-to-own arrangement. However, she was forced out of the home anyway because he failed to continue putting money toward her mortgage.

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Lincolnshire IL Steel Tube Maker RathGibson Files For Bankruptcy

According to Bloomberg.com, steel tube maker RathGibson has filed for reorganization bankruptcy following months of financial troubles at the Lincolnshire, Illinois company. The bankruptcy petition is backed by the company's lenders. Lenders own about three-fourths of the company and will receive the majority of the company's stock during the bankruptcy reorganization process.

Court records show that RathGibson may have up to 5,000 creditors and debts that amount to $319 million. The company has roughly $305 million in assets. The plan, according to CFO Jon Smith, is to file quickly, make a realistic plan, and quickly emerge from Chapter 11 bankruptcy. The financial troubles were blamed on microeconomic conditions.

"The debtors have been continuously exploring their options for addressing their liquidity and capital structure issues with their lenders, noteholders and other constituents," Smith said in court papers filed Monday with the U.S. Bankruptcy Court.

With the approval of the bankruptcy court, RathGibson will borrow up to $80 million from affiliates of Wayzata Investment Partners LLC, Eaton Vance Corp, and BlackRock Inc. This money will help with operation costs as the company finds its bearings in this difficult economy.

Troubles started for RathGibson earlier this year when a drop in demand for steel tubes created cash flow problems and then credit line issues. In May of 2009, the company was in danger of defaulting on a $55 million line of credit.

RathGibson was founded in 1999 and sold in 2007.

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Hannibal: Historic Rockcliffe Mansion Owner Declares Chapter 13 Bankruptcy

The historic Rockcliffe Mansion, which was built by lumber barons at the beginning of the 20th Century, has had a troubled past of late and will be passing hands once again after its recent owner declared Chapter 13 bankruptcy.

According to US Bankruptcy Court records, Rockcliffe Mansion owner Rick Rose filed for Chapter 13 bankruptcy protection on April 30. Among his assets were the famed Hannibal mansion, a bed and breakfast, a rental property, and a list of personal property. The personal property listed included between $80,000 and $120,000 worth of Rockcliffe Mansion antiques, including bed linens, quilts, and clothing.

The historic contents of the house were set to be auctioned off earlier this month by St. Louis antique dealer John Robinson III of Finches by Robinson, but the bankruptcy proceedings led to a cease and desist letter from Palmyra State Bank.

In 2005, Rose took out a $325,000 loan from Palmyra State Bank in order to buy the Missouri mansion, which is on the National Register of Historic Places. There is also a second mortgage on the property for $60,000 with Raible and Brown Insurance of Hannibal.

Recently, a man from the suburbs of St. Louis, Kenneth Marks of Maplewood, Missouri, has made an offer to buy the large house and everything inside of it for $700,000. A hearing about the proposed purchase has been set for September 1, and, if it is approved by the bank, the closing would take place within 60 days.

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Washington Park: Entire Southwestern Illinois Town Files For Bankruptcy

A small village in St. Clair County, Illinois, with a population of about 6,000 is seeking bankruptcy protection in light of mounting debts. Bankruptcies for towns, villages, and cities are very uncommon, but the recently economic downturn has led to several municipal bankruptcies and reorganizations in the last year.

In the village of Washington Park, the problem seems to stem from decades of mismanagement and poorly kept records as well as a lost lawsuit involving the town's $30,000 strip club licenses. The judge ruled the licensing practices unconstitutional. Now, the town is struggling with $80,000 in lawyer fees as well as $30,000 less in income each year. The small town also owes money for a number of government investigations.

The village also suffered from two different embezzlement issues. Dorothy Triplett, the town's former payroll clerk, stole almost $144,000 from the town and pled guilty to the offense last spring. Linda Connor, a former assistant to the mayor, admitted to stealing more than $300,000 of the town's money.

According to its bankruptcy filing, Washington Park owes creditors over $1 million and has less than $50,000 in assets. Some of their creditors include the Illinois Municipal Retirement Fund, Illinois Department of Employment Security, and Johnny "Chico" Matt, who sued the town 2004 for discrimination based on political affiliation.

"Every time I turn around, they're hitting us with suits," Mayor John Thornton said. "And on top of the lawyers, we got people stealing from us and the feds raiding."

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Chicago Cubs To Benefit From Declaring Bankruptcy?

A national baseball team has not declared bankruptcy for decades - but the corporate owner of the Chicago Cubs is considering filing for Chapter 11 bankruptcy in order to speed the sale of the team and smooth the transition from owner to owner. Legally, the move to petition for bankruptcy would make buying the Chicago Cubs a simpler and safer idea, as a Chapter 11 bankruptcy would protect a future owner from old claims by old creditors moving forward.

Presently, the Chicago Cubs are owned by Tribune Company, which filed for bankruptcy protection last December and which also owns the Chicago Tribune. As part of their reorganization plan, the Cubs are being sold to pay off other Tribune debts. The entity who buys the Cubs in the wake of the bankruptcy would not suffer any effects of the bankruptcy filing.

Although declaring bankruptcy is not vital for the Cubs' survival, and although the popular Chicago baseball franchise as a whole is not in financial trouble, the one-to-two day petition for Chapter 11 bankruptcy would hasten a sale and help Tribune Co.'s continued survival. As a pre-packaged bankruptcy, the Cubs would be able to reemerge from their bankruptcy in a few short weeks.

Currently, the Ricketts family is interested in buying the cubs, Wrigley Field, and other related Chicago Cubs assets for a rumored $900 million.

The Seattle Pilots (now the Milwaukee Brewers) declared Chapter 11 bankruptcy in 1970.

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Illinois Chrysler Plant Reopens In Belvidere After Bankruptcy

The Illinois Associated Press and the Rockford Register report that a local auto assembly plant owned by Chrysler is re-opening its doors as part of the company's reorganization in the wake of a Chapter 11 bankruptcy in May. The auto plant, which makes Dodge Calibers, Jeep Patriots and Jeep Compasses, is expected to boost the local economy, increase morale, and start a new chapter for the troubled American car company, although about 1,000 workers at the plant will not return to work.

The Illinois car assembly plant shut its doors earlier this year on May 1 - just a day after Chrysler LLC filed for Chapter 11 bankruptcy protection. Over the next few months, the car company reorganized and streamlined its business, cutting jobs, changing ownership, and transitioning to bare-bones dealerships and management.

The Boone County plant employed 2,700 people in Belvidere, and the abrupt closing of the plant and bankruptcy was a blow to the already-struggling Illinois economy. Now 1,700 people will return to work this week, starting on Monday, July 27. At the initial closing of the plant after bankruptcy, some older workers were offered retirement packages while others were transferred to nearby plants, such as from St. Louis.

The closed plant even affected those not associated with the auto industry, such as the owner of a gas station along U.S. 20 near the factory. In addition several supplier operations employing over 1,000 people can also resume business.

Jerry Butitta, owner of Jerry Butitta Automotive Services in Belvidere, said, "It's not just Chrysler going back to work, it's the whole community."

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The Granite Source of Missouri Files For Chapter 7 Bankruptcy

According to the Springfield Business Journal, Springfield, Missouri, is still seeing a 20 percent increase in business bankruptcy filings - both filings for reorganizations and filings for liquidations. A case that perhaps best illustrates the bankruptcy troubles for Misosuri businesses may be The Granite Source of Missouri, LLC, which has been troubled by bankruptcy since the beginning of the economic crisis.

Founded by Scott and Tracy Hardwick in 1999, the Missouri granite company began its life as Springfield Granite. However, a reorganization bankruptcy at the end of 2006 saw the company's assets sold to Sheila Collins. However, just a few years later, the newly-named Springfield Granite-Plus is once again in financial trouble. Collins decided to file for Missouri personal Chapter 7 bankruptcy in June and sold the assets of the company back to the Hardwick family in February.

Why is this granite company having trouble finding success? Although Collins had initial business and received several awards for her business, the drop in new construction left her high and dry - and leaving bankruptcy to be her best last choice. There simply wasn't enough demand for her product. And like many small business owners, Collins dipped into her own personal assets in order to try and save her operation. Her personal bankruptcy cites "primarily business debts" of more than $1 million with assets between $100,000 and $500,000.

In Spingfeild, MO, Chapter 7 liquidation bankruptcy filings are up 33 percent from last year. Experts point to a weak economy and job loss as two main factors in the increase.

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Automatic Stay Lifted, Plaza Square Apartments Facing Foreclosure In St. Louis

According to the St. Louis Business Journal, the largest apartment complex in downtown St. Louis, Plaza Square Apartments, is again facing foreclosure. Taking up four acres of land, the building lies with Chestnut Street to the south, Olive Street to the north, 15th Street to the east and 17th Street to the west. It is made up of five building that hold well over 900 apartments. The apartment building, which is owned by Urban Developers, LLC, was originally facing foreclosure in October of 2007 - a foreclosure that was halted by an automatic stay after the company filed for bankruptcy just 24 hours before.

Now, however, the automatic stay has been lifted as of June 22 by U.S. Bankruptcy Judge Charles Rendlen, and foreclosure looms again. This time, the foreclosure sale will take place on the steps of the Civil Courts Building in St. Louis at noon on July 28.

The automatic stay was lifted after Urban Developer's lender, Natixis Real Estate Capital, Inc., asked the court to move the process out of bankruptcy. Urban Developer did not object to the request.

Urban Develop bought the property in 2004 for $22 million - and still owes approximately $21 million. Since 2004, the building owners have dealt with a number of issues with the complex, including failed building inspections and troublesome elevators.

The large apartment buildings are being marketed actively and have been since roughly May. Early reports say that at least two prospective buyers are interested in buying the property, although bids amounts are unknown.

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Evanston, Illinois, Developer Files Individual Chapter 7 Bankruptcy

Struggling to survive the housing crisis, fighting multiple lawsuits, and deep in debt, real estate developer Thomas Roszak has filed for individual Chapter 7 bankruptcy. In addition, some of his businesses are also filing for Chapter 7 liquidation bankruptcy.

According to the Chicago Sun-Times, the Evanston builder has a number of unfinished constructions on his hands, from an unfinished Sienna Court Condominium complex at 1720 to other structures at 1415 Sherman Avenue, 1210 Chicago Avenue and 1572 Maple Avenue. In some of the cases, construction has not been finished on the buildings, while in others, condos are simply not selling like they were a handful of years ago.

In addition, Roszak is facing a number of lawsuits related both to his building businesses and to his debt. Two years ago, one of his parking garages collapsed under one of three finished Sienna condominium buildings - and now Federal Insurance Company is seeking $1 million in damages. Finally, an unfinished condo on one of his properties is making access to three other buildings difficult to residents, especially those with disabilities.

In a written statement from Roszak, he praises his company's completed projects and points to dropping housing prices and home values as the cause of his troubles. In his personal bankruptcy, Roszak claimed between $50 and $100 million in debts and between $1 million and $10 million in assets. His business, Roszak/ADC, claimed between $10 and $50 million in debts and less than $50,000 in asserts.

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RiseUp Magazine Files For Chapter 7 Bankruptcy In Missouri

Facing multiple lawsuits, the short-lived RiseUp magazine company, RiseUp Publications, has filed for Chapter 7 bankruptcy in Kansas City, Missouri. The magazine, which focused on race relations, only appeared for six weeks in 2008 before running into financial difficultly.

The magazine, which is owned by Frank and Janice Ellis of Ellis Management Marketing Group Inc., was published and inserted into local newspapers such as the Kansas City Star, and reached 4 million readers at one point in its existence. The Washington Post, New York Daily News, Chicago Tribune, and other papers briefly carried the magazine.

However, two different lawsuits earlier this year solidified the fact that the publication was in trouble: the Kansas City Star claimed that RiseUp owed them $2.2 million while a California newspaper chain is seeking the $93,000 that they are owed.

When RiseUp filed for bankruptcy on Wednesday in the US Bankruptcy Court of the Western District of Missouri, the company claimed liabilities between $1 million and $10 million, assets of less than $50,000, and fewer than 50 creditors.

Some contend that the magazine was briefly popular when Barack Obama's presidential nomination was top news, and that RiseUp also suffered many of the same problems facing print publications across the country.

Janice Ellis, a businesswoman who once ran for Mayor in Kansas city, had this to say of the magazine: "I started RiseUp because I wanted to provide a readily accessible tool to help us solve some of the problems we face as a society when it comes to race relations."

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Knight-Celotex Files For Chapter 7 Bankruptcy In Northfield, Illinois

Although building products manufacturer Knight-Celotex originally filed for Chapter 11bankruptcy, which would allow the Northfield, Illinois, company to reorganize and remain open, the company has now switched to a Chapter 7 bankruptcy filing, which involves liquidation.

Knight-Celotex, which makes fiberboard insulation sheathing and sound-deadening materials, originally declared bankruptcy on April 6, 2009, after defaulting on a $34 million dollar loan from Bank of America. At the time that they filed, the company had $357,000 in cash and inventory valued at $7.2 million. Revenue in 2008 was $79 million.

The case was filed in Chicago, Illinois at the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division. The case is being overseen by US Bankruptcy Judge Pam Hollis. This week, Hollis fielded an emergency request by Bank of America to switch the bankruptcy proceedings from Chapter 11 to Chapter 7 after it was discovered that Knight-Celotex CEO James Knight was resigning from his position. Bank of America also told Hollis that $1 million in unauthorized expenses were incurred.

The Court appointed Mr. Barry A. Chatz, Attorney at Law with the firm of Arnstein & Lehr, LLP as Trustee. Chatz believes that there is strong interest in the company and hopes that Knight-Celotex will be sold soon. The Knight-Celotex plant in Danville has suspended operations, as officials wait and hope to find a buyer. The company's vice president has told workers that they would work out payroll and benefits issues in the coming days.

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Illinois Foreclosures Up 54% From A Year Ago

For those in Illinois affected by the recent economic crisis or for those in Illinois who are in upside-down mortgages or in danger of losing their houses, the news from RealtyTrac is mixed this month.

RealtyTrac, the largest online real estate marketplace, reported that an estimated 13,647 homes across Illinois went into foreclosure in April of 2009, a drop of a little over ten percent from the numbers in March, when over 15,000 houses received a foreclosure filing in Illinois. However, although the number of foreclosures dropped over the last month, rates are still through the roof, up 54 percent from last April.

Compared to the national numbers, Illinois is also doing worse than the country as a whole on average. Foreclosure rates were static between March and April of 2009, and up about 32 percent in comparison to April 2008. One in 374 homes across the United States received a foreclosure filing in April of this year, the highest rate ever seen since RealtyTrac began recording foreclosure statistics and rates.

The state suffering the most during the recent foreclosure crisis is Nevada, where the rate of foreclosures is a staggering one in 68 homes.

What caused the foreclosure crisis? Over the last few years, mortgage companies began to loosen their standards for issuing home loans - to the point where many people who would not normally be qualified to buy a home did. The greed of the financial industry left many families in houses they couldn't afford. At the same time, the economic crisis caused a rise in unemployment and a stranglehold on credit - two problems that are causing many families to fall behind on their mortgage payments and declare bankruptcy.

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John Deere Home Faces Foreclosure In Moline, Illinois

In the recent economic crisis, it is not just middle-class families who are struggling with their mortgage and struggling to keep their homes - this June, two historic buildings in Moline, Illinois are also facing foreclosure due to the current financial times. On July 5, Sauk Valley Bank will take repossession of a former home of John Deere as well as the home of his granddaughter, located on 11th Avenue in Moline, Ill.

The home was purchased by Roger Colmark of Sterling, Ill., for $100 in 1996. During the sale of the property, it was agreed that Colmark would renovate the home as a bed-and-breakfast on the bluff. However, more than a dozen years later, the renovations have never been completed and the home is in foreclosure.

Moline Mayor Don Welveart is determined to keep the project going under a different contractor, saying that the house has improved with the addition of new windows and a new roof, and that the space could be turned into a functioning property with a little more work.

Colmark is in debt due to a number of related loans as well as a number of fines from the city because of his use of unlicensed contractors. When asked, he cited red tape, delays, and a fire as some of the many reasons he ran out of money and could not complete the project as promised and avoid foreclosure. Colmark claims that it took him seven years to gain approval of the State Board of Historic Preservation in order to install an elevator in the building.

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May Bankruptcies Reach 6000 Per Day

If the pace continues as predicted, commercial and consumer bankruptcies could reach a staggering $1.5 million in 2009 - according to an Automated Access to Court Electronic Records report earlier this month. This number would be much higher than in previous years - with the exception of 2005, when many rushed to declare bankruptcy before changes in the bankruptcy laws took place. Just over one million people declared bankruptcy last year.

The Automated Access to Court Electronic Records report may be showing the affects of recent job losses across the country, with a rising unemployment rate that could see double digits and that could easily affect bankruptcy filings. These job losses paired with other recent economic woes such as hard-to-get credit, a poor housing market, upside down mortgages, and shrinking retirement accounts will not bode well for the already overwhelmed bankruptcy courts in Illinois and Missouri.

Robert Lawless, professor of law at the University of Illinois, told the media that while credit cards used to help families through rough financial patches, that support is no longer there.

In May, bankruptcy filings were taking place at a break-neck rate of 6,000 per day across the United States, with almost 400 commercial filings per day. Many economists are concerned that consumer bankruptcy filings will lead to more commercial bankruptcy filings in future months. Still, filing for bankruptcy may be the best choice for families and individuals facing insurmountable debt, pressure from creditors, and few options.

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Homeowners Lose In Senate Bankruptcy & Mortgage Modification Vote

After months of debate, the United States Senate voted against allowing bankruptcy judges to modify mortgages and delinquent loans in bankruptcy court. Advocates of the plan said that the bill would have at least temporarily stalled the spiking number of foreclosures and helped the economy back to its feet. Alternatively, those who opposed the bill feared it would harm already-reeling banks.

The bill did not pass due to a 51-45 vote. Similar cramdown provision legislation passed in the House last month.

The Obama administration hoped that giving bankruptcy judges the power to modify loans would encourage loan sevicers to negotiate with borrowers to find a long-term payment solution and save many from facing foreclosure and bankruptcy. "Cramdowns," housing advocates said, would give lenders and banks more reason to deal with struggling homeowners.

Banks and other financial institutions lobbied against the bill, saying that giving bankruptcy judges more power would raise interest rates and make an already erratic market even less stable. Others added that it would give an unfair advantage to those who are not making loan payments, while everyone in the economy is struggling.

Although the bankruptcy reform leg of Obama's overall plan to stop foreclosures has stalled, other areas of the plan are in full swing. Three out of four mortgage servicers are participating in a loan modification program already, in which homeowner mortgages are lowered to 31% of troubled family's incomes. An estimated 134,000 home mortgages were modified in March - a much larger number than usual.

Over 8 million Americans are in danger of foreclosure currently - and scholars believed that this bill could have prevented an estimated 1.7 million families from losing their homes.

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Illinois Attorney General Sues Debt Settlement Firms That Often Make Debt Worse

Debt settlement companies are profiting from the country's recent economic crisis - but, unfortunately, some are taking advantage of those struggling with credit card debt. Although some can help consumers consolidate or negotiate debt, many charge exorbitant initial fees that plunge users deeper into financial trouble. Even worse, some debt settlement companies do little or no good in regards to lessening debt.

Now, however, Illinois Attorney General Lisa Madigan and Acting Secretary of the Illinois Department of Financial and Professional Regulation (IDFPR) Michael T. McRaith have filed two lawsuits against debt settlement companies that Madigan says uses deceptive marketing techniques on television and on the internet and that do not go through with their promises to alleviate debt.

One lawsuit has been filed against SDS Corporation's top executives, including Bruce Hood, Raymond Dorso, and Joanne Garneau. The other lawsuit has been filed against Debt Relief USA and the President of Debt Relief USA, Kelly Reilly.

Although many debt settlement companies say that they are a valid alternative to declaring bankruptcy, in some cases, they simply put customers in a worse situation. After charging large up-front fees and advising those in debt to halt credit card payments, they will often take months before beginning negotiations with credit card companies - often times, it is too late by then to save clients from the bankruptcy that they had been avoiding.

Madgian says that both companies violate the Illinois Consumer Fraud and Deceptive Business Practices Act, putting forth that the debt settlement businesses do not help consumer credit scores or alleviate debt issues.

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Meadowbrook Farms Coop May Reopen Soon After Chapter 7 Bankruptcy

A month after closing the doors of its pork processing plant and filing for Chapter 7 bankruptcy, Meadowbrook Farms Cooperative is now considering two perspective buyers who could give the innovative hog processing plant a second chance. The two companies considering the pig facility will be touring the plant in the coming weeks - the 600 workers employed there were laid off in January, just weeks before the company declared bankruptcy.

Former Meadowbrooks CEO Richard Klene has said that finding additional financing to stave off bankruptcy was impossible due to the recent poor economy - but that there were a number of exciting possibilities in the pork processing industry moving forward.

Trustee Laura Grandy of the firm Mathis Marifian Richter Grandy of Belleville is in charge of liquidating Meadowbrook Farms' assets in order to pay back creditors. While a number of the company's vehicles have already been sold to clear some of their debt, Grandy plans to keep as much of the equipment at the plant as possible to create an attractive deal for potential buyers looking for a turnkey processing plant that they can open quickly and without making many other purchases.

The plant is only five years old - making the facility up-to-date and equipped with newer furnishings and machinery. Over the last five years, the plant produced 150 million pounds of meat annually.

Originally, the Co-op was owed by about 200 hog farmers from around Illinois. The plant was meant to save hog farmer's money and give them more control over their products.

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Chernin’s Shoe Outlet Running After Recent Chapter 7 Bankruptcy

After declaring Chapter 7 bankruptcy on February 7, Chernin's Shoe Outlet is operating again - this time with a new owner.

The Discount shoe store, which has seven locations in Chicago, Illinois, and one location in St. Louis, Missouri, has a troubled financial past since its opening over one hundred years ago - with three bankruptcies on record. The store most recently re-opened in 2003 by brothers Randy and Steven Shifrin, but the duo fell on hard times during the recent economic crisis. A few months ago, the shoe store listed $524,881 in assets and $6.3 million in liabilities in its bankruptcy filing.

The chain of bargain shoe stores re-opened on April 1, in ten different locations and with over 80 employees. Owner Movant ShoeZone LLC made the purchase by buying the company's name, equipment, and inventory as well as several of the store's leases.

Movant ShoeZone is run by Noel Wilner, though Chernin's will now be operated by the former Bigsby & Kuthers President Michael Karpik, who is a friend and associate of the Shifrin brothers. Karpik brings over 30 years of merchandise and sales experience in the Chicago area and, armed with an equity stake, hopes to bring a new professionalism to the struggling discount shoe store. He hopes that by offering quality low-price shoes, consumers will be offered the "right product at the right time."

Four days before liquidation, Movant purchased  over $2 million secured debt from Chernin's lender.

Randy Shirfin, the former CEO who does not own a stake in the company, has been asked to stay on at the company.

For more information on Chernin's, visit the company's website.

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Chapter 7 Bankruptcy Puts Fate Of Historic Lincoln Hotel In Urbana Into Question

According to the News-Gazette, the foreclosure of the Historic Lincoln Hotel came to a halt when the owner of the property filed for bankruptcy and stalled the sheriff's sale. The sale was to take place on Friday, but just hours before, Urbana Enterprise declared Chapter 7 bankruptcy in federal court.

In most cases, declaring bankruptcy will freeze all debts, including mortgage debts, resulting in an automatic stay. In this case, the Bloomington, Illinois, company chose liquidation bankruptcy in order to save the 1921 hotel from being auctioned at the Champaign County Courthouse.

The Bavarian-style hotel closed in mid-March, not long after the bank that owned the mortgage, Marine Bank, foreclosed on the property. Although there were plans on re-naming and renovating the hotel next year, these plans have now fallen by the wayside. As with many automatic stays, the stalled foreclosure will allow the current property owner to think over their options and plan a solution.

Urbana Enterprise bought the hotel just a year ago for $1.3 million. The company also acquired the hotel in a foreclosure sale when owner Jay Bhaghavan defaulted on his own mortgage loan.

Urbana city developers are also in on how the hotel can be put to good use, floating the possibility that the building could house a restaurant and go through with the planned renovations. The urban developers also said that they would like to see a national hotel chain take up the challenge of getting the building back in running order.

There are already rumors of a potential buyer for the property, although that buyer was not named.

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Associated Press: Bankruptcies Surging Across The Country

In 2005, lawmakers tried to lessen the number of bankruptcy filings across the country by tweaking federal bankruptcy laws to make it more difficult for individuals to file for Chapter 7 and Chapter 13 bankruptcy. But while the change in rules succeeded in curbing bankruptcy instances for a few years, the recent poor economy has caused the numbers to skyrocket again.

The numbers tell the story: 1.2 million people have filed for bankruptcy since April of 2008 according to the Associated Press. Just in the last month, over 130,000 people have filed - a figure that is a 46 increase from last year and an 81 percent increase since 2007. Before the bankruptcy laws were changed, increasing fees for filing and requiring credit counseling for those who chose bankruptcy, two million people filed for bankruptcy in 2005. Directly after the change, only about 600,000 filed in 2006.

University of Illinois College of Law professor Bob Lawless said that the bankruptcy rate is not expected to level off until 2010, at about the same time that the economy will begin to recover according to financial experts. Next year, the bankruptcy filings are expected to peak at 1.6 million bankruptcies. This is the same figure that lawmakers were recording prior to the 2005 bankruptcy law reforms.

Rises in the rate of bankruptcy during recessions and depressions is normal, though the phenomenon often lags behind bad news in the economy. In many cases, surges in bankruptcy can indicate which states have been hit hardest by economic woes.

"The point of the bankruptcy system is to give the honest but unfortunate debtor a fresh start," Lawless said. "The fact that people are waiting longer to file shows just how mean-spirited the law is."

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New Developments In Battle Over Possible Bankruptcy Law Changes

In the most recent update on the potential changes to current bankruptcy law, the Wall Street Journal reports that Senate Assistant Majority leader Dick Durbin of Illinois may be thwarted by a filibuster in the senate that would block any changes sought by democrats.

The change in the bankruptcy law would allow "cramdowns" - bankruptcy judges across the country to change the terms of residential mortgages in an attempt to save families from foreclosure. Although current law allows judges to modify the terms of mortgages on anything other than primary residence mortgages, first mortgages have been untouchable for a quarter-century. Some would want the cramdowns to expire in 2014. Other want to make clear that this would be a last resort - not meant for everyone filing for bankruptcy.

Those who are for the bankruptcy law modification argue that giving judges that power would keep people in their houses and that it may save money for the lender in the long run - especially considering the large number of foreclosed properties that banks are struggling with currently. The foreclosure process can cost lenders up to $100,000, whereas a modified loan may only cost them ten percent of the current market value or a lowered interest rate.

Those who disagree with the changes to the bankruptcy law are mostly in the banking and financial services industry. They say that this change could potentially raise national interest rates - though they do not have evidence to back up this claim. Although conservatives tried to block the bill in the house, they failed.

US Senate leaders hope to come to an agreement about the state of the cramdown bankruptcy law by Memorial Day.

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Cook County Courts To Halt Foreclosures Until Fall Due To Huge Caseload

The court that serves Chicago and the surrounding area of Cook County, Illinois, has made the decision to halt the majority of its foreclosure cases until September, reports housingwire.com. The court cites an enormous glut of foreclosures for the delay, saying that it will spend the summer working through the more than 10,000 existing foreclosure cases that already exist.

The Cook County Circuit Court is the one of the most populous counties in the country and Chicago has suffered from a high volume of foreclosure cases even before the housing crisis began earlier this year. In 2008, Cook County received 43,876 mortgage foreclosures - a number that is expected to rise to over 63,000 cases this year. This increase of 30% has caused the court to hire 11 extra judges for the foreclosure hearings and assign six extra courtrooms for the foreclosure activities. In addition, extra law clerks and secretaries have also been added as of April in an attempt to handle the huge caseload.

Still, the court is struggling to handle to high volume of incoming foreclosure cases. In the next step toward solving the problem, Judge Dorothy Kirie Kinnaird order to halt most incoming cases until the end of August in hopes of resolving all cases filed in 2008 by that date. One exception to this rule will be properties that are vacant and abandoned.

Some predict that the caseload in Cook County might get worse before it gets better, especially if those filing for Chapter 13 bankruptcy are allowed to ask the court for mortgage modifications in order to save their houses from foreclosure.

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Southern Illinois Farmer Gets 10 Years For Bankruptcy Fraud

According to the Chicago Tribune, a farmer from Southern Illinois has been sentenced to ten years in prison for bankruptcy fraud. In an East St. Louis, Illinois, court on Monday morning, a federal bankruptcy judge found 61-year-old Joseph Diekemper guilty of bankruptcy fraud and perjury. Diekemper is also a suspect in a double-murder case that is under investigation.

The farmer, who lives in Carlyle, Illinois, concealed money and assets during his multi-million-dollar bankruptcy case last year, including farm equipment, grain, and milk. The bankruptcy case became even more complicated when a couple from Keyesport reported a tractor owned by Diekemper hidden behind a false wall on the property where they lived. Days after reporting the property to authorities, the coupe, George and Linda Weedon, were found shot to death. The murderer had also set their house on fire in an effort to destroy evidence.

Although Diekemper's attorney denies his client's involvement with the double murder, guns belonging to Diekempter were found buried in the woods nearby and will undergo forensic testing soon. One gun, however, a .22-calier pistol, is still missing.

Two others have also taken the fall for being involved in Joseph Diekemper's bankruptcy fraud. His wife, Margaret Diekemper, was sentenced to two years of probation, while a neighbor, Marvin Kampwerth, was charged with perjury and faces prison time. The judge ordered Margaret to cut off contact with her husband.

During a statement given to the court, Diekemper apologized to his family, friends, and neighbors for lying and cheating.

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Central Illinois Bankruptcy Rates Increasing

The State-Journal Register out of Springfield, Illinois reported this week that the trend of rapidly rising bankruptcy rates across the country are also being seen in Central Illinois - a part of the state that includes court bankruptcy data from Springfield, IL, Peoria, IL, and Danville, IL.

According to information released by the U.S. Bankruptcy Court in Springfield, Illinois, there were 8,789 separate bankruptcy filings during the last federal fiscal year, which ran from October 1, 2007 to September 30, 2008. This figure illustrates a 21 percent increase from the number of bankruptcy filings during fiscal year 2007.

The numbers don't improve from there for those in Central Illinois. Since October 1, 2008, and through April 1, 2008, another 4,955 people have filed for bankruptcy. This represents another 21 percent increase from the already elevated numbers seen in 2008.

The last peak in bankruptcy filings too place in federal fiscal year 2005, in which over 18,000 people filed for bankruptcy. This was a result of the new federal legislation that made filing for bankruptcy more difficult.

The increase in bankruptcy filings in Central Illinois is certainly related to the troubled economy. With increasing rates of joblessness, a floundering stock market, as well as a mortgage and foreclosure crisis, many Illinois residents are struggling to keep their heads above water. Bankruptcy may be the most viable option for those who have found themselves in impossible financial situations since the recession began.

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Bad Economy Leads Even The Most Unlikely To Bankruptcy

Many across the country are under the wrong impression that those who file for bankruptcy in Illinois or Missouri make bad choices or lack restraint. But, as USA Today reports, the poor economy and other current financial woes are illustrating more than ever that bankruptcy can happen to anyone.

People of all ages, backgrounds, classes, and careers are finding themselves in the "perfect storm" of money issues and financial problems. A lost job, a medical emergency, a risky mortgage, a few credit card bills, or less overtime hours can combine to create a disaster.

One man, 89-year-old Howard Zynkian, chose to file for Chapter 13 bankruptcy after accidentally refinancing his house with a bad mortgage. When his monthly mortgage payments jumped $1,300 a month, he found his residence at risk of foreclosure and with bankruptcy his best option for financial recovery.

With 37 percent of Americans admitting to worrying about money this month, and with 3.2 million people seeking professional credit counseling just last year, this economy is proving that a few missteps and a lot of bad luck could put anyone in the position of filing for bankruptcy.

"For many, it's not one particular event, as much as it is life events starting to pile up," says Gerri Detweiler, debt expert. "And it's compounded by the economy and the lack of credit options that are available."

Some are turning to spending their retirement savings to keep their head above water - an option that may be much more dire than filing for bankruptcy.

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Government Eyeing Bankruptcy Reform As Filing Mounts In Poor Economy

When the government made significant bankruptcy reforms in 2005, there was a spike in both Chapter 7 bankruptcy and Chapter 13 bankruptcy filings. Three years later, as millions of families struggle to make ends meet in light of global economic turmoil, job loss, and foreclosure trends, analysts are seeing another spike in bankruptcy filings.

Some financial experts and critics say that this continued flood of filings means that the reforms are a failure. Others argue that the increased bankruptcy rate simply reflects hard times, USA Today reports.

Either way, lawmakers are once again examining how bankruptcy law reform could help Americans in need and get the country moving in the right direction.

"There is continuing concern about the bankruptcy-reform bill and what its effects have been," says Rhode Island Senator Sheldon Whitehouse. "We are looking at a number of things that we can do to address the problems."

Some say that the 2005 reforms made filing for bankruptcy too complicated - and that it favored banks over debtors. Others say that the 2005 reforms have helped officials clamp down on bankruptcy fraud. Most agree that at least temporary laws that allow judges to modify mortgages and keep people in their homes in the face of foreclosure and bankruptcy is needed.

One positive aspect of bankruptcy is that it allows bankruptcy filers to immediately begin rebuilding their credit and stimulating the economy. Right now, the nation needs consumers to jumpstart the economy, and those who have declared bankruptcy and have a fresh start are more likely to help than those who continue to be mired in debt.

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Chicago Tribune Reports That Economy Will Lead To Many Choosing Bankruptcy

In light of the troubled economy and foreclosure crisis, the Chicago Tribune has written a feature article about the bankruptcy option for the millions of Americans who are struggling to pay their bills and stay afloat despite layoffs, credit card bills, and other income problems. In their in-depth, article, they discuss the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy as well as who would benefit from declaring bankruptcy.

What are the signs that filing for bankruptcy might be the best option for you? The Tribune asked Robert Lawless, a University of Illinois College of Law bankruptcy expert. Bankruptcy may be a good option for you if your house is in the foreclosure process; if you are taking money out of your retirement fund; if creditors are taking large amounts of your income; if you feel that there is no way you will be able to repay your debts; if you can only make minimum credit card payments for the foreseeable future; or if you owe significantly more money than you will make in your current situation.

How will declaring bankruptcy affect your home and foreclosure status? It may stall a foreclosure, but not prevent one. Chapter 13 bankruptcy could allow you to spread your missed mortgage payments over the next three to five years, though Chapter 7 bankruptcy will only save your house if you are able to pay past mortgage payments with you assets.

To better understand whether bankruptcy is an option for you, and whether Chapter 7 or Chapter 13 would be appropriate for your individual situation, it is best to consult with a bankruptcy lawyer in your area.

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St. Louis Couple Plead Guilty To Bankruptcy Fraud

According to The Alton Telegraph, an East St. Louis, MO, man and a woman have pleaded guilty to bankruptcy fraud after concealing information about their financial lives to the court.

The formerly married couple hid information about a pending workers' compensation claim from the U.S. Bankruptcy Court for the Southern District of Illinois in East St. Louis and the bankruptcy trustee during proceedings - a move that was investigated by a number of organizations, including U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering, and the FBI.

Thirty-three-year-old Keith Gary of Glen Carbon pleaded guilty to three count of bankruptcy fraud, while his ex-wife, 31-year-old Stacie Gary of Glen Carbon pleaded guilty to four counts of bankruptcy fraud as well as one count of employment benefits fraud. Allegedly, Stacie Carbon attempted to collect unemployment benefits while she was employed.

The penalties for bankruptcy fraud are tough - each count of bankruptcy fraud comes with maximum fines of a quarter-million dollars and maximum prison sentences of five years. The penalties for unemployment fraud include fines up to a quarter million dollars and up to 20 years in prison.

Both bankruptcy fraud defendants will be sentenced in June.

If you are filing for bankruptcy, it is vital that you are completely honest about your financial standing, debts, and assets. A knowledgeable bankruptcy lawyer can help you avoid making mistakes in your bankruptcy process that could have dire consequences.

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Meadowbrook Farms Files For Chapter 7 Bankruptcy In Belleville

The St. Louis Business Journal reports that the hog processing company Meadowbrook Farms Cooperative filed for Chapter 7 bankruptcy on Saturday, March 20, 2009. The hog co-op, which is based in Belleville, Illinois is owed by over one hundred local hog farmers. The company produces a number of pork products made from antibiotic-free animals, such as ham, baby back ribs, pork chops, ham, and pulled pork.

Financial problems with the company began showing themselves in January, when the pig co-op closed the doors of a processing plant and slaughterhouse in Rantoul, Illinois, laying off the 600 workers employed there. Many of the farms who brought hogs to the plant last spring were not paid for their livestock.

Richard Klene, the CEO of Meadowbrook Farm, explained that a major customer, Triad Foods Group, had ended their contract, starting the financial trouble. A lawsuit against Triad Foods Group is pending, since the lost contract meant $5 million of lost income for Meadowbrook. Klene told reports he hoped to find an investor or lender to bail out the company, but the weak economy wasn't helping their already-dire situation.

The bankruptcy filing at the U.S. Bankruptcy Court for the Southern District of Illinois listed $28 million in assets and $44 million in debts, with $14.6 million owed to Stearns Bank. After the filing, 20 managers marketers from the Belleville, IL, office also lost their jobs. The cooperative plans to liquidate their assets.

Meadowbrook Farms opened its doors in 2002, and many hoped it would offer farms more control over their hog products and greater profits for their hogs.

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Gas Stations Can Now Place $500 Hold On Your Visa Card

In a story airing on KMOV News Channel 4, a new rule went into effect on October 3, 2008, which will allow gas stations to put a hold of up to $500 on your Visa debit or credit card each time you fill up your tank.  This change is designed to allow the stations sufficient time to make sure the Visa card being used is valid.

Under the old rule, stations could place a hold of up to $75 on the card for up to 2 days.  The new rule allows the hold to be released after 2 hours.  However, this change could significantly increase your chances of having insufficient charges to your account due to unavailability of held funds.

For more on this story, click on the link below.

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Bankruptcy On The Rise In Missouri

The Southeast Missourian reports that the state's lawyers say bankruptcy filing is on the rise across the region. In the difficult economy that seems to be getting worse and not better, more and more families and individuals are seeking relief from creditors and debtors and attempting to keep what little they might have left.

From 2007 to 2008, the number of people filing for bankruptcy in Southeast Missouri increased by 29 percent. For two years ago, the increase jumps to 77 percent.

Although filing for Chapter 7 or Chapter 13 bankruptcy brings with it a stigma, those filing for bankruptcy now are those who have not been irresponsible with their money or "deadbeats" - they are for the most part victims of the recent economy. Many lost their well-paying jobs in the building and manufacturing industry while others have been hit with huge mortgage payment increases from flexible-rate loans.

"Ninety-nine percent of the filers in Southeast Missouri are legitimate hardship cases," said a local lawyer. "They are not planning it. These are not abusive filings."

In the case of one couple in Cape Girardeau County, bankruptcy is simply the best option for their situation. Both husband and wife had secure finances and well-paying jobs. But when Dana Corp closed last year, and when the husband was faced with a medical condition, the couple was quickly in trouble.

Now the couple is behind on their house payment, their medical bills, and their credit card payments. They simply want to wipe their slate clean and start a new life.

Others seeking bankruptcy are construction workers who were used to living on overtime pay but who now struggle to fill their weeks with work. Still others are faced with medical emergencies or expensive divorces.

Overall, with rising bankruptcy numbers, attorneys across the state reiterated that filing for bankruptcy is not shameful if it is the right choice for you. Especially in these times, a financial crisis can strike almost anyone.

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National Bankruptcy Law May Change

According to the Chicago Tribune, bankruptcy law in the United State may be altered shortly. The change would give judges extra power when modifying primary home mortgages and hopefully slow the foreclosure rate that is at an all-time high presently.

The change would mean that bankruptcy would not necessarily result in higher mortgage payments on filer's homes - currently, missed mortgage payments are usually placed back onto the principal during the formation of repayment plans. If the change is passed, however, banks may choose to modify existing loans instead of seeking other options.

Currently judges may modify the principal of other property besides primary residences, such as vehicles, second homes, or vacation homes. Homeowners using the new rule would have to seek voluntary loan modification from their mortgage companies at least 15 days beforehand. The Congressional Budget Office estimates one million homeowners would benefit from the measure.

The change is backed by democrats, housing advocates, and President Barack Obama. It would be a temporary measure during these tough economic times, and would not be applicable for situations that arise after the law is in place. Those in support of the bill don't think it would lead to a flood of new families and individuals declaring Chapter 13 bankruptcy, as the process is complicated enough to discourage those who do not need the process.

"We thought bankruptcy was needed as a way to say to the industry, 'If you don't do it, somebody's going to do it for you,' " said Kathleen Day, a spokeswoman for the Center for Responsible Lending, a non-partisan group that targets what it calls abusive lending practices.

Opposition to the bill includes some republicans as well as the mortgage industry. They argue that they would have to raise loan costs to make up for mortgages modified by the bankruptcy judges. Those who do not deserve it may be paying for other people's forgiven loans.

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$726 million in St. Louis Commercial Properties in Foreclosure

The St. Louis Business Journal is reporting that roughly $726 million worth of St. Louis, Missouri, commercial properties are either currently in foreclosure or in danger of entering the foreclosure process. The staggering amount of money represents 45 different properties.

The data was released by a commercial property research firm, Real Capital Analytics (RCA), who tracked all St. Louis commercial properties worth more than $2.5 million.

"RCA has tracked an increasing amount of distressed properties in recent months," Managing Director Dan Fasulo said. "With almost $5 billion worth of foreclosures (nationwide) in January, this will be the first month where foreclosures outpaced actual commercial property sales."

Twenty-nine of the properties, consisting of $500 million of worth, are considered potentially troubled by the research firm. These properties have financially distressed owners that may lead to the bank reclaiming ownership.

Twelve of the businesses are considered troubled, which means that either the owner has declared bankruptcy or the owner has defaulted on his or her loans. This category represents $118 million of the total.

Four properties are in foreclosure, with a worth of about $109 million. These properties consist of two office building and an old movie theater: The Union Center 10 Cinema, The Power House office building, the Corporate Square office building, and the Grand Central office building. The Power House office building is three-fourths filled with tenants.

The largest of the foreclosures was on St. Louis' largest hotel, the 1,100-room Renaissance Grand & Suites Downtown. The hotel's bondholders are retaining control of the building until a buyer of the $98 million property is found.

On the bright side, a smart businessperson with money in hand can benefit from some unbelievable commercial property deals.

Many of these foreclosures are due to the trouble of refinancing in tight credit market.

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Kansas City, MO, Group Works Toward Foreclosure Prevention

KMBC Channel 9 reports that members of the Kansas City, Missouri community are coming together to stop the rash of home foreclosures that have stunned the area over the last two years. The group, Communities Creating Opportunity, is on a mission to educate the community about foreclosures, change the mortgage process, and temporarily change bankruptcy laws to help people keep their homes.

The group is not just about helping their neighbors - they also have their own stake in fixing the housing crisis. Foreclosed homes drop housing values in the area, attract crime, and are often used as illegal dumping grounds. The CCO hopes that their activism will prevent more than 8,000 foreclosures in the future around the state of Missouri.

The group helps keep already foreclosed houses free from trash, squatters, and property damage. At the same time, they are offering a foreclosure prevention workshop in Kansas City aimed at educating those who are facing foreclosure in the near future. During the six-hour workshop, troubled homeowners can meet with financial counselors as well as their lenders in order to form a plan of action.

In the future, the CCO is planning on taking political action, beginning with putting pressure on mortgage companies to find ways to keep families in their homes. The group is also interested in pushing lawmakers to change bankruptcy laws in order to help those with housing trouble find a way to pay their mortgage.

According to Communities Creating Opportunities, foreclosures don't just affect those losing their house - it affects their friends, family, neighbors, and community at large. It's everyone's issue.

"This is what happens when you have foreclosure. It not only affects the people who are in foreclosure, it affects the neighborhoods, the children, the families," said Marian Youngblood, a member of the new group.

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Chernin’s Shoe Outlet In Chicago Files For Chapter 7 Bankruptcy

According to the Chicago Tribune, the century-old Chernin's Shoe Outlet LLC filed for bankruptcy on Monday, February 4. This isn't the first time the discount footwear chain has seen financial trouble - the company filed for bankruptcy in 1999 and has seen tough times sprinkled throughout the years since it's opening in 1907.

The store, which is filing Chapter 7 bankruptcy, is based in Chicago and has stores throughout the state of Illinois and in six other Midwestern states. Overall, the chain have 19 locations that will be closing when the store goes out of business. Ten of the stores are located in the city of Chicago and suburbs - mostly on the south side and in the southern edge cities.

Early in its history, Chernin was an outlet store with large storefronts throughout the city. In fact, it made the idea of discount shoes popular. In 1999 the store closed after declaring bankruptcy. In 2003, some of the former executives of the shoe store reopened business at a scaled-down level. Chief Operating Officer Randy Shifrin was involved in both incarnations of the store. Shifrin, who is also the largest shareholder, has not talked to media

When filing for bankruptcy, the company listed its assets as being 500,000 and $1 million and its debts as being between $1 million and $10 million. The company will liquidate its assets to pay off their creditors, which number 170 and which are mostly local companies such as Amcore Financial Inc. and Sun-Times Media Group Inc. In its 1999 filing, the company listed $18 million in assets and $29 million in debt.

Some blame the poor quality of the low-price shoes on the store's financial woes. However, many businesses of this size are struggling in today's tough economy.

Chapter 7 bankruptcy filings have rose 60 percent in the last year in the Chicago area according to Medill Reports Chicago.

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Missouri Couple Avoids Foreclosure Under Contract For Deed

A couple from Republic, Missouri who made monthly payments but nearly lost its home has filed suit against Greenleaf Cos., alleging that the company breached their contract and engaged in questionable business practices.

In the suit filed by David and Susan Foster, the couple claims to have purchased a house from Greenleaf in August 2007 for nearly $252,000 on a contract for deed. The Republic house belongs to Marionville resident Talya Finn.

As the middleman, it was expected that Greenleaf would collect money from the Fosters and pay Finn enough for her mortgage payments to be covered. However, with insufficient income, Greenleaf officials have said the company was unable to pay Finn and other investors.

According to the Fosters, they made all of the agreed-upon payments on time, but foreclosure was threatened against their house when Greenleaf failed to ensure the house’s loan had been properly paid. The Fosters said that foreclosure proceedings had been initiated, but canceled when Greenleaf “made arrangements to remedy the deficiency.

The Fosters seek punitive damages of at lease $100,000 and a release from their contract.

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Charter Communications may file for bankruptcy

Cable industry observers anticipate St. Louis-based Charter Communications could file for bankruptcy as early as this week, according to published reports.

For more information, follow the link below.

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An Open Challenge To Dust Yourself Off

The hope didn't last long, at least for some.

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Bankruptcy as a Step to Solvency

THE idea of declaring bankruptcy may be unpleasant, even abhorrent, but for many people right now it could be the best option.

The question is: How do you make that choice? How bad do things need to get before you throw in the towel, and most of your debts, and petition the courts for a fresh start?

For more information, follow the link below.

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Crestwood Court Macy's is among 11 set to close

The post-holiday shopping blues finally came knocking at Crestwood Court. Macy's Inc. will close its department store at the struggling Crestwood mall after 39 years of operations there.

For more information, follow the link below.

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Bankruptcy filings jump by one-third in 2008

Overall consumer filings reached 1,064,927 last year, up from 801,840 in 2007, according to data collected by the National Bankruptcy Research Center and published by the American Bankruptcy Institute, an Alexandria-based research group.

For more information, follow the link below.

 

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Retailers Who Have Filed for Bankruptcy in 2008

Retailers have come under growing pressure as consumers cut their spending because of the drop in home values, worries about job security, eroding credit and higher food costs. Experts expect a spate of bankruptcies after holiday sales are tallied and weaker players become unable to survive.

For more information, follow the link below.

 

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Brooke founder files for personal bankruptcy

The founder of Brooke Corp., the now-bankrupt franchiser and financier of insurance agencies, has filed for personal bankruptcy.

In an abbreviated Chapter 11 filing Tuesday in U.S. Bankruptcy Court in Wichita, Robert D. Orr didn’t enumerate his assets or liabilities. But he checked off boxes listing his estimated assets as ranging from $100,000 to $500,000 and his estimated liabilities as ranging from $50 million to $100 million.

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Feds adopt rules to crack down on some credit card abuses

In the most sweeping changes to credit cards in decades, federal regulators on Thursday approved new rules to crack down on so-called unfair and deceptive practices by card issuers, such as raising interest rates on existing debt.

For more information, follow the link below.

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KB Toys Announces Bankruptcy Filing

In yet another sign of the grim holiday season, KB Toys has filed for bankruptcy protection for the second time within the past four years. The company announced its decision on December 11 in addition to its plans to immediately begin going-out-of business sales at its stores.

The company, which has been in existence for 86 years, said that its debt is a direct result of a “sudden and sharp decline in consumer sales” due to the poor economy.

A toy retailer filing for bankruptcy just before Christmas is an indication of how bleak things have become, as such stores typically make up to half of their sales during the holidays. However, analysts say they expect toy sales during the holidays this year to be flat or slightly down from the total of $10.4 billion a year ago, according to market research firm NPD Group.

In response, toy retailers such as KB Toys have amped up their discounts. KB Toys aggressively reduced prices, expanded its values program, and offered “Buy 2, Get 1 Free” promotions.

However, these deals were not enough. The company said that between October 5 and December 8 sales in stores open at least one year showed a nearly 20 percent decrease in same-store sales.

Filing for Chapter 11 bankruptcy protection instead of Chapter 7 liquidation allows for a company to retain more control over selling off assets. Under Chapter 7, the court would immediately appoint a trustee to take over the case.

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Payday loan problem: financial 'quick fix' leads to personal bankruptcy

Some 10 million American households borrow money through payday loans each year, and payday lenders now have more storefronts than McDonald’s and Starbucks combined. New research by Vanderbilt Law School Assistant Professor Paige Marta Skiba found that payday loan applicants who received the quick cash after their first application were significantly more likely to file for Chapter 13 bankruptcy than those whose initial application was denied.

For more information, follow the link below.

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Consumer bankruptcy filings jump vs year ago

NEW YORK (Reuters) - U.S. consumer bankruptcy filings rose 39.2 percent in November from a year earlier but were down slightly from October, the American Bankruptcy Institute said on Wednesday.

The bankruptcy group, which used data from the National Bankruptcy Research Center, said there were 99,925 consumer bankruptcy filings in November, down from October's 106,266.

For more information, follow the link below.

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St. Louis Foreclosure Help

As foreclosures continue outpacing efforts to modify mortgages, calls have gone out for more robust relief to be provided to struggling homeowners by the federal government.  In the month of October, there were reports of nearly 280,000 U.S. properties being foreclosed, five percent more than in September and 25 percent more than in October 2007, according to Realty Trac.

According to Senator Chris Dodd (D-Connecticut), mortgage modification efforts by individual lenders and industry coalitions are unable to keep up with foreclosures when they occur at a rate of 9,000 per day.  Dodd, the chair of the Senate Banking Committee, and other members of considering legislation that would make the federal government a major player in the business of foreclosure prevention. Possible measure include a 50 percent federal guarantee on modified mortgages and bankruptcy law changes allowing a debtor’s mortgage to be reworked by a judge.

On Oct. 3, Congress believed that it was addressing foreclosures by passing the $700 billion financial rescue package. The Treasury Department said at the time that the money would be used for purchasing distressed mortgages and mortgage-backed securities from financial institutions, unfreezing credit markets and allowing loans to be reworked on more favorable terms to homeowners, according to supporters.

But the Treasury Department concluded not long after that purchasing mortgages would take too long, considering credit markets’ rapid deterioration.  Instead, it was decided that the bailout money would be used for making equity investments in banks in hopes of spurring more lending.  However, many members of Congress believe that the root cause of the financial crisis facing the U.S. is the collapse of the housing market.

There has been some progress made in modification of mortgages through private-sector efforts, but the Federal Deposit Insurance Corp. says that only four percent of seriously delinquent mortgages are being modified each month.  There are two problems noted by critics of existing mortgage modifications: Many homeowners still default on the loans because payments are still too high and many servicers foreclose on properties instead of modifying loans due to contractual obligations.

For more information, click on the link below.

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Exclusive millionaires club falls on hard times

Nobody in Montana is laughing at the millionaires-only Yellowstone Club as it struggles to stay open after declaring bankruptcy. It's more like smirking.

For more information, follow the link below.

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Credit cards: Cash infusion might not help riskiest borrowers

The Federal Reserve's $200 billion backstop may not spur lending on credit cards to the same degree as on other consumer loans.

For more information, follow the link below.

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Bailout, Bankruptcy or Both for Big Three?

While federal bailouts and bankruptcies are often viewed as separate alternatives for the automakers, it seems entirely possible that both could occur.

For more information, follow the link below.

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Bankruptcy Filings Effecting Circuit City

Faced with pressure from vendors and consumers not making purchases, Circuit City Stores Inc. filed for Chapter 11 bankruptcy protection on November 10, hoping that the move will help it survive into the holiday season.  Under Chapter 11, Circuit City, which is the second-biggest electronics retailer in the U.S., would be able to continue operation while it develops a reorganization plan.

The company said that it cut 700 more jobs at its headquarters in Richmond, Virginia after an announcement the week before that 20 percent of its stores would be closed and thousands of workers would be laid off.  Chief Financial Officer Bruce Besanko cited three factors as the reason for filing for Chapter 11: erosion of vender confidence, decreased liquidity, and the global economic crisis.

According to Besanko, the belief was that the company would not be able to receive goods for Black Friday and the holiday season if it did not receive immediate relief. Failing to receive goods for the busy shopping seasons could potentially cause the company irreparable harm.

Circuit City has had only one profitable quarter within the past year and has seen significant declines in traffic along with heightened competition from rival Best Buy Co. and others. In 2007, about 3,400 retail employees, replacing them with lower-paid workers. Analysts said the move could backfire, damaging morale and driving away customers.

The retail industry as a whole is faced with what is expected to be the weakest holiday season in decades, the struggles of Circuit City have intensified as consumers spend less and credit becomes tighter.

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Federal Bailout to Include Credit Card, Loan Companies

U.S. Treasury Secretary Henry M. Paulson Jr. said today his priority for the $700 billion bailout program will be to bolster banks and consumer lenders, such as credit card, student loan and car loan companies, rather than supporting other struggling industries.

For more information, follow the link below.

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Billionaire Club Files For Bankruptcy

The Yellowstone Club, which includes Bill Gates as a member, can't pay its creditors.

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St. Louis Bankruptcy Filed For Another Business

Christy Refractories Co, LLC, a manufacturer based out of St. Louis, has filed for bankruptcy protection because of an ever-increasing number of asbestos injury lawsuits filed against the company. The end result will likely be a trust established to satisfy all future claims.

The company recently filed for bankruptcy because of liability they face stemming from a company that manufactured asbestos related products, which Christy acquired in 1995.

Nearly 400,000 people in the U.S. filed suit against more than 6,000 different companies after being diagnosed with mesothelioma and other injuries from asbestos. Many of them resulted in multi-million dollar settlements or verdicts and some estimate the total cost of asbestos litigation in the U.S. could eventually reach $200 billion.

Though Christy was aware of the suits at the time of acquiring the company in 1995, the bankruptcy petition indicates that as more individuals have filed suit after being diagnosed over the years, their financial exposure has grown to the point of making bankruptcy protection a necessity.

The petition says that there are currently more than 1,000 asbestos suits pending against Christy. There is $18 million remaining on an insurance policy for the company which has already paid out approximately $27 million.

Christy is not the only corporation. Since 1976, more than 70 U.S. companies have been forced into bankruptcy because of asbestos litigation, more than half of which have filed since 2000.

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Bill collectors get tough, and complaints surge

NEW YORK - A rapidly increasing number of people are complaining about getting harassed and abused by bill collectors.

Nearly 71,000 people filed such complaints with the Federal Trade Commission last year, roughly double the number in 2003. In addition, more than 14,000 complained to the Better Business Bureau.

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Crisis Now Trickles Down To Credit Cards

The New York Times reports that after years of flooding Americans with credit card offers, banks and lending institutions are beginning to feel the impact on the heels of the foreclosure mess.  Most easy credit card offers have stopped and the banks are starting to write off a tremendous amount of bad credit card debt.

According to the report, more than $21 billion dollars was written off just in the first half of 2008 and that number is expected to continue.  The report further illustrates the amount of debt most Americans are under and there simply is no way out without defaulting. 

You can read more about this story below.

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St. Louis sports teams brace for economic downturn

Oct 24, 2008 (St. Louis Post-Dispatch - McClatchy-Tribune Information Services via COMTEX) -- WB | Quote | Chart | News | PowerRating -- During a recent lecture at UCLA, Patrick Rishe showed his "Economics of Sports" class how the professional sports industry, shielded in the past in many ways from a fickle or distressed economy, won't be unscathed by the current economic crisis. 

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Foreclosure Proves Challenge For Government

The increasing number of home foreclosures has lawmakers scrambling to figure out a way to help those in need of assistance before they lose what they have worked so hard to get.  MSNBC reports that more than 2,700 Americans lost their home each day from July through September.  This number was over twice the amount of homes lost to foreclosure the same period last year.

To read more on this story, click the link below.

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Personal bankruptcies on the rise

NEW YORK (CNNMoney.com) -- In 2005, Congress passed a bill aimed at reducing the number of personal bankruptcy filings. But that was before a housing meltdown, a credit crunch and a global economic downturn.

In the midst of the financial crisis, more and more Americans are filing for bankruptcy. And experts say the numbers are likely to get worse.

For more information, follow the link below.

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Bankruptcy Filings Approach All-Time High

The bankruptcy laws were changed in 2005 in an effort by Congress, supported by President Bush and backed by every credit card company in existence, to decrease the number of bankruptcy cases filed by consumers.  When the law was passed, I would tell everyone I knew that simply passing a new law would not keep those in need from seeking the help they must have to survive. 

AAcer is reporting that electronic filing statistics for the year 2008 will again surpass the million case mark and have reached numbers not seen since the new law was enacted.  In fact, for the month of August, 4,476 cases were filed per day, which tops any month since the passage of the law.

You can read more about this story by clicking below.

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Credit cards, credit crunch: consumers feel pinch as issuers `go on the defense'

Consumers are not just having a tougher time obtaining auto loans and mortgages. The credit crunch and weak economy also are taking a toll on credit cards.

Perhaps you have noticed that you're receiving fewer offers for credit cards in the mail. If you have iffy credit, you might find it difficult to qualify for a card now. Or you may be able to obtain one only at a high interest rate.

For more information, follow the link below.

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St. Louis companies weather Wall Street storm

Financial markets continued to fluctuate Tuesday as the Dow dropped more than 22 points by noon to 10,895.12 points. That’s on top of the more than 500-point plummet Monday, which was triggered by the double punch of Lehman Brothers Holdings Inc.’s bankruptcy and the forced sale of Merrill Lynch & Co. to Bank of America Corp.

For more information, follow the link below.

 

 

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House rejects $700 billion bailout bill

The House rejects  the $700 billion bailout bill for troubled financial institutions by a vote of 205 to 228.

Update at 2:09 p.m. ET: Dow industrials fall more than 600 after House defeats bailout plan.

Update at 2:13 p.m. ET:  In a breakdown of the vote by party, more than 140 Democrats voted for the bill and nearly 95 against. Around 65 Republicans voted in favor and over 130 against.

For more information, follow the link below.

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Failed bailout vote hits Wall Street like a hurricane

NEW YORK — The "nay" vote heard around the world wiped out $1.2 trillion in stock market wealth Monday, the first one-day trillion-dollar loss in Wall Street history.

For more information, follow the link below.

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Wachovia's banking sold to Citigroup

Another week, another seismic shift affecting Arizona's banking landscape.

Citigroup has emerged as the latest player with a major presence in Arizona after its purchase of Wachovia Corp.'s banking operation for $2.16 billion.

The move makes it one of the largest banks in Arizona. Wachovia had entered Arizona last year with the purchase of World Savings Bank, which had about 37,000 customers here.

For more information, follow the link below.

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Commentary: Bankruptcy, not bailout, is the right answer

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.

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St. Louis Private Schools Respond to Parents Who Need Economic Help

In general, local private schools aren't seeing enrollment affected by the economic downturn. The reason, according to school officials interviewed for this story, is that private school education is a priority for their students' families even in troubled times.

"I remind parents that an excellent education is the only thing that can never be taken away," said Robert Ciampoli, headmaster of Andrews Academy in Lake Saint Louis. The school, which serves boys and girls in kindergarten through fourth grade, relocated this school year to a new $7 million, 73,000-square-foot school.

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Congress Votes No To $700 Billion Bailout

The proposed $700 billion legislation to rescue the financial system was voted down today in Congress by a vote of 228-205.  This is, and will continue to be, a very controversial subject with the average consumer facing hard economic times.  As can be expected, news reports are providing continuous coverage of the legislation and what it means to us.

Michelle Caruso-Cabrera with NBC was interviewed today about what the future of credit looks like.  The video of her interview, "Tight Credit Market To Get Tighter" is informative on the early predictions to this mess.  You can read more about today's vote by clicking on the link below.

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Bankruptcy Proposal To Avoid Foreclosure Part of Government Bailout Legislation

There is not a news story that comes out these last few days that doesn't mention the crashing economy and predicts the doom and gloom if something isn't done to fix it.  The U.S. government has proposed legislation to provide $700 billion to bailout the lending industry and try to get the country back on track.

Opponents of the bill want to make sure that the corporate leaders of the bailed out companies don't profit and get rich from taxpayers money in the deal.  In addition, a group of Democrats has added language which would ultimately allow bankruptcy judges to modify mortgage terms in a bankruptcy case in an effort to prevent the increasing number of foreclosures and help to stabilize the economy.

You can read more on this story below.

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Why Criminal Charges Can Be Stopped By Filing Bankruptcy in St. Louis, Missouri

MSNBC is reporting a recent desicion by a St. Louis Bankruptcy Judge who ordered a business owner to re-pay money that was collected from a building contractor under an order from a Connecticut criminal court that convicted him of stealing from the business owner. 

In a case that began in St. Louis, Missouri back in 2006, Mark Poveromo hired Mark R. Koch of Illinois to complete an $80,000 project for his pet food business in Thomaston, Conn. Poveromo paid $39,500 up front, but Koch never did any work, according to court documents.

Poveromo filed criminal charges and Koch was convicted in Connecticut of first-degree larceny in April 2007.  In that conviction, Koch was ordered to pay restitution. He paid $25,000 and began monthly payments to Poveromo on the balance.

Two months before his conviction, Koch filed for bankruptcy protection in St. Louis, stopping any claims against him for any debts owed. Poveromo apparently continued with the prosecution of criminal charges and had Koch arrested in connection with the debt.

Koch then filed a complaint in the bankruptcy court accusing Poveromo of intentionally violating the stay on claims by having him arrested to collect on the debt.

After arguments by both sides, Judge Charles Rendlen III agreed with Koch. In a ruling filed in December, Rendlen noted "the highly suspect timing" of Koch's arrest and conviction after filing for bankruptcy.  The judge said Poveromo intentionally violated the bankruptcy stay on claims by causing Koch's arrest to collect on the debt.

"Allowing a creditor to use the threat of incarceration on charges related to a prepetition debt undermines the most fundamental premise of bankruptcy law: the guarantee of equal treatment among creditors pursuant to the bankruptcy code," Rendlen wrote.

Rendlen ordered Poveromo to pay back the restitution Koch had given him as well as attorney's fees and costs.

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Is My Money Safe With My Bank?

As anyone that reads the news can tell, the headlines are full of new stories concerning the collapse of Wall Street and the banking industry. But so far, consumers are beginning to have real fear about who's holding their money and if it is going to be there tomorrow. Almost half of Americans live week to week.  The funds in the bank may be all they have.

With the latest news about Lehman Brothers, Freddie Mac and Fannie Mae, along with earlier reports about IndyMac and Countrywide, we all want the money-madness to be over. But the bank failures keep coming. More and more local and national banks appear on the most recent FDIC "danger" list—which they will not disclose until it's too late to recover. Some news outlets have been hinting at the names on the list, but only the FDIC has the information we need to know: Is my bank safe?

If your bank is FDIC insured, your money is insured, with limits. Obviously if something were to happen with your bank, it can take some time to get 100% your money, but in the 75 years the FDIC has been around, they have maintained a solid record of coverage. However, there has never been a banking and credit crisis like this, but I the guarantees the FDIC provides have always proven solid.  If you have money in a bank that is currently on the brink, however, you might consider moving it to a safer alternative just to be safe.

There are many consumer-information pages at the FDIC's web site where you can find out if your bank and your individual and joint accounts fall under FDIC coverage.  If you want to find out if your deposits are insured, click here.  The FDIC has an online tool to check coverage if you have multiple accounts and more than $100,000.

And if you are looking for a different place to put your money, even if you have FDIC coverage but you are just uneasy about it, check Bankrate.com. The information contained on these sites will never be a guarantee the bank will also go under, but always do your research before making a move.

The main thing to remember is to avoid panicking and taking action that could be hurtful to your financial situation.  Good, deep research into any area of concern is the first step in understanding what is going on and how you can best protect yourself.

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Life After Foreclosure Isn't Pretty - Why Bankruptcy Can Help

It is common knowledge that more and more families are facing foreclosure.  Over the last 14 years, Castle Law Office has helped thousands of families avoid a foreclosure and save their home.  But when the loss of the home is unavoidable, what happens next?

A recent article on CNBC discusses life after foreclosure and what it can mean for you.  As you will see, this article explains some helpful information when you are trying to purchase another home after a foreclosure takes place.  Keep in mind, this article does not address how a chapter 7 or chapter 13 bankruptcy has on this process.  In many cases, when a home is foreclosed upon, there is a balance owed because the home did not sell for what was owed on it.  This is referred to as a deficiency balance and the lender can go after you for that balance in court.

In most cases, filing bankruptcy can eliminate any deficiency balance after a foreclosure and help you get back on your feet and on your way to buying another home again.  To read more about life after foreclosure, click on the link below.

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New Study Shows Declining Credit Card Use Among Americans Due to Economic Downturn

SAN FRANCISCO--(BUSINESS WIRE)--Financial research firm Javelin Strategy & Research (www.javelinstrategy.com) released today its latest report on credit cards and consumer spending, which shows that Americans are cutting back on credit card use and having difficulty paying off balances. The report indicates conservative spending behaviors as a result of the economic downturn and the ramifications of the mortgage crisis, soaring fuel costs and rising food prices.

“The sharp decline in credit card spending challenges the popular belief that Americans are charging basic goods in order to sustain their quality of life,” said Jim Van Dyke, president of Javelin Strategy & Research. “Consumers are making deliberate cutbacks like shopping at superstores, eating out less and watching what they charge. We believe this is because most people have already been impacted by the downturn or they’re anticipating that we haven’t seen the worst of it. It’s very cautious behavior.”

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Fenton, MO Chrysler Plant to Close

ST. LOUIS, Mo. - For 25 years, the minivan has been a bread-and-butter vehicle for Chrysler. When its U.S. competitors recently abandoned the vehicle and its stigma as "uncool," Chrysler hung in, saying it still saw a future despite a shrinking market.

Ford left, and though GM still makes minivans, it doesn't appear to be introducing a 2009 version of the Uplander and is expected to end production next year.

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Credit Card Debt Piling Up for Americans

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Alabama sewage job drags county down the drain

The largest county in Alabama is headed for the biggest municipal bankruptcy in US history, a US$3.2 billion mess caused by a corruption-riddled sewer construction project and the credit crunch.

Jefferson County, which has 658,000 residents and includes the state’s biggest city, Birmingham, got into trouble after the courts ordered a huge upgrade of its sewage system to meet federal water standards and stop raw waste being dumped into streams, the St Louis Post-Dispatch reported.

The county borrowed money on the bond market and when the mortgage crisis hit, the interest rates on the debt rocketed. The nearly completed sewer project, under construction since 1996, is now US$3.2 billion in debt.

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St. Louis Post-Dispatch newspaper cuts 18 positions to trim costs

ST. LOUIS — The St. Louis Post-Dispatch said it has eliminated 18 jobs as it copes with declining advertising revenue and increasing newsprint costs.

The job cuts, announced Thursday, are in human resources, production and newsroom management.

"Like many businesses across the country, we continue to feel the economic challenges, including consecutive newsprint increases over the past 13 months," Kevin Mowbray, the newspaper's publisher, said in a statement.

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Bankruptcy Cases Higher for Senior Citizens in Missouri and Illinois

According to the Consumer Bankruptcy Project, the number of bankruptcy cases filed for senior citizens over the age of 55 has soared between the time frames of 1991 and 2007.  So much so, that as of 2007, if you are over 65 years of age, you are two times more likely to have to file for bankruptcy relief.  The reason - it seems that the multiple effect of the loss of significant income along with higher medical costs drives our seniors to the edge.

To read more, follow the link below.

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St. Louis Bankruptcy Attorney Reveals Subprime Lenders Confessions

We have all heard recent reports of the subprime lending mess and how it has directly contributed to the overall increase in foreclosures through the first part of 2008.  I ran across an interesting article and video by an insider where he shares secrets the mortgage industry doesn't want you to know.  It's interesting to read that these loans are called "liar loans" by insiders in the industry because of the approval without verification of income or assets.

Richard Bitner, a former subprime lender, explains the ins and outs of the business, how these shady lenders took us all for a ride, what you need to know whether you’re buying, selling, or just watching it all play out, to make sure it never happens again.

For more on this story, click the link below.

The good news, a Chapter 13 bankruptcy can be the solution to help you deal with a bad subprime loan.  I have helped thousands of St. Louis, Missouri and Illinois families save their home from foreclosure by helping them file a Chapter 13 bankruptcy.

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Credit Counseling in St. Louis, Missouri and Illinois May Do More Harm Than Good

When the average person begins to get behind in their credit card and other debt, many first turn to the services of a credit counseling center.  Nowadays, these can be found both online and offline.  There are many credible counseling centers that have helped people get back on their feet, but there are an equal number of these services that provide little to no help and some that will totally rip you off. 

Although even the best credit counseling service helps some people, if you are having problems with foreclosure, repossession or garnishments, these companies will not likely be able to help you with that serious of an issue.  An experienced bankruptcy attorney can usually do much more to provide debt relief with the full power of the bankruptcy laws behind you.  Where the credit counseling service negotiates with creditors to try to get them to make a deal, under the bankruptcy law, creditors are not in a position to negotiate.  They must accept the outcome whether they like it or not.

St. Louis, Missouri and Illinois bankruptcy attorney James Brown with Castle Law Office has been helping families file for Chapter 7 and Chapter 13 bankruptcy relief for over 15 years.  If you are facing serious problems as a result of being behind in credit card debt, house payments, child support or even back taxes and student loans, we can help.  To find out more, request a free copy of our Ultimate Debt Relief Package today.

 

To learn more about credit counseling services, click the link below.

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How To Come Back From Bankruptcy

Q. All of my adult life I have had excellent credit. Recently related to a catastrophic illness my husband and myself had to declare bankruptcy. I would like to reestablish my credit and don't know how to start.

For more information, follow the link below.

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Small businesses buried by credit card debt

The financial health of small businesses is deteriorating quickly, if Advanta Corp.'s earnings, released yesterday, are any indicator.

The issuer of small-business credit cards from Spring House said it gave up on collecting $130.5 million of its customers' debts in the second quarter, up from $102.1 million in the first quarter and $50.7 million a year earlier.

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Bush signs sweeping housing bill

WASHINGTON: President Bush signed into law on Wednesday a huge package of housing legislation that included broad authority for the Treasury Department to safeguard the nation's two largest mortgage finance companies and a plan to help hundreds of thousands of troubled borrowers avoid losing their homes.

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Credit card gripes flood Fed

The comments respond to a rule that the Fed has proposed to curb "unfair and deceptive" lending. The public has until Aug. 4 to weigh in. Already, nearly 33,000 consumers, advocates and industry groups have done so — by far the most responses ever received on a credit card proposal, the Fed says. It plans to issue a final rule later this year.

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Missouri cuts two interest-rate reduction programs for students

JEFFERSON CITY | Missouri’s student loan agency has eliminated two borrower benefit programs, shutting off opportunities for some new customers to reduce their interest rates by up to 3 percent.

The Missouri Higher Education Loan Authority made the cuts in order to leverage federal funding for new loans in the coming school year. Lenders have seen their ability to create new student loans shrivel in the frozen credit market.

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Fallout From Bad Loans Rocks Regional Banks

Home mortgages and other loans that the banks made in good times are souring so fast that many of the lenders are scrambling to prop themselves up. If the pain worsens — and many analysts say it will — some of these banks, like Fifth Third’s predecessors, may eventually seek out suitors, most likely large national rivals.

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Missouri Lender pushes NovaStar closer to bankruptcy

NovaStar Financial Inc. on Thursday drew closer to bankruptcy after a lender accelerated its loan and declared $51 million in obligations immediately due and payable.

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St. Charles County eclipses national, state unemployment rates

More people in St. Charles County are out of work this spring than they were at this time last year. After the housing market collapse fueled a snowball effect among construction job losses, unemployment is now hitting a higher number of office workers.

In March, 5.7 percent of workers in St. Charles County were out of a job, a figure not even approached in the last 10 years. In April, the unemployment rate settled down to 5 percent. Yet in April of 2007, only 3.5 percent of workers in St. Charles County could not find work.

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In the Debt-Soaked Economic Slump, Americans Find Solace in Support Groups

After years of free spending -- $200 jeans, a silver BMW and other grown-up toys -- Michael Wagner had racked up $25,000 in credit-card debt and was behind on his mortgage and car payments. Creditors called night and day. It was a "hopeless downward spiral," he says.

Then, last November, the 34-year-old sales manager for the St. Louis Post-Dispatch joined the "Sunday morning breakfast club," a group of debtors who meet weekly over coffee and eggs to share money woes. Mr. Wagner says he is now on the road to financial recovery, helped by his discovery that "I wasn't alone."

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Bankruptcy for Elderly on the Rise in St. Louis Missouri and Illinois

In recent years, statistics show that elderly Americans have sought bankruptcy-court protection at sharply faster rates than other adults.  The main reasons cited are  overwhelming  amounts of debt compared to fixed income and the rising cost of medial bills.

From 1991 to 2007, bankruptcy filings increased among those ages 65 or older by 150%, according to AARP, which will release the new research from the Consumer Bankruptcy Project. Suprisingly, the biggest rise occurred among those ages 75 to 84, whose rate soared 433%.

For more information on the study and its results, click the link below.

 

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New Bankruptcy Law Isn't Helping St. Louis Debt Relief

When the U. S. Congress passed the Bankruptcy Abuse Prevention and Consumer Act of 2005, it was designed to curb abuse of the bankruptcy system and lead to more personal responsibility for consumers.

We are now 3 years after the passage of the law and although it has managed to make a dent in the number of bankruptcies filed in the early years after its enactment, bankruptcy filings are on the rise and fast approaching pre-2005 levels. 

Why is that?  With the subprime mortgage and home foreclosure mess, high gas prices and Congress' refusal to put a cap on the interest rates charged by credit card companies is only  the beginning to an economy we haven't seen since the early 80s.

For more on this topic, click on the link below.

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Chapter 13 Can Still Help As Home Foreclosure Surges 48% in May, 2008

Foreclosure filings were up nearly 50% last month compared to the same time period last year according to RealtyTrac, Inc.  Nationwide, there were over 261,000 foreclosure filings in May, up 7% over April.  That's bad news for an economy that is reeling from high gas prices, high interest rates and high unemployment rates.

Sobering statistics like these are leading to more calls for government help, especially from lawmakers pushing a plan for the government to guarantee as much as $300 billion in new loans to help borrowers refinance into cheaper, fixed-rate mortgages.  However, the bad news is it doesn't appear this is a top priority for lawmakers across the country.

The good news is Chapter 13 of the U.S. Bankruptcy Code can help you in most cases save your home and reorganize your debt into a manageable monthly payment that you can afford. 

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Tougher rules needed on credit-card policies

Federal officials are proposing tougher rules on how credit-card companies handle their relationships with customers — steps that are long overdue.

 

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2 Ky. widows sue U.S. government over husbands’ VA deaths

EAST ST. LOUIS, Ill. - Two Kentucky widows are suing the U.S. government over surgical care they say killed their husbands at a southern Illinois Veterans Affairs hospital where surgeries were halted last year after a spike in patient deaths.

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Diagnosis of blood clot at issue in malpractice trial

A Jasper County jury Tuesday began hearing a wrongful-death lawsuit brought against a Joplin family-practice physician by the wife and mother of a 28-year-old man who died more than four years ago of a pulmonary embolism, or blood clot.

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Despite new laws, Chapter 7s are on the rise

Melanie Fletcher lost her job in 2006, when her position as a program educator for Oregon's Washington County was eliminated. She was able to secure another job within the same office, and though it paid less she and her husband, an optician, managed to get by on their combined incomes. Then the Fletchers decided to sell their home in Beaverton last year and move to a rural area near their relatives, about an hour away. That was when the trouble started.

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Lender's goof slams credit scores

A blunder by student lender Sallie Mae briefly trashed the credit scores of hundreds of thousands of unwitting borrowers who signed up for the company's graduated-payment loans.

The loans allow borrowers to make smaller payments, sometimes covering only the interest owed, for a few years before increasing to full payments. But within the past week, Sallie Mae began reporting the loans to credit bureau Equifax as essentially delinquent, sending borrowers' scores plunging.

Sallie Mae officials said Wednesday that they had fixed the problem and that borrowers' scores had returned to normal. The error affected "less than 10%" of the lender's 10 million borrowers, a spokesman said.

Elan Glasser of Santa Monica, Calif., received an e-mail alert from his credit monitoring service this week that his Equifax FICO score had dropped 81 points, from 727 to 646. (A score above 720 on the 300-to-850 FICO scale is generally considered good; 620 to 660 is considered mediocre.)

When he investigated, Glasser found nothing significant had changed on his Equifax credit report -- except a notation on his Sallie Mae account of "arrangements made with credit grantor to make partial payments."

'I look like a deadbeat'

Such a notation is typically used for debt settlement arrangements in which the lender is paid less than the full amount owed. As a result, borrowers' Equifax credit reports showed the loans as seriously delinquent, with past-due balances and a recent history of missed payments -- all extremely detrimental to credit scores, which lenders use to gauge creditworthiness.

"Suddenly, I look like a deadbeat," Glasser, a filmmaker, said Tuesday. "I'm worried now that my interest rates will go through the roof."

Sallie Mae officials said the coding error was included in a recent download of credit information to Equifax. The other credit bureaus, Experian, TransUnion and Innovis, were not affected, they said.

"Sallie Mae fully understands the importance of one's credit rating, and we sincerely apologize for this error," company spokeswoman Martha Holler wrote in an e-mail Tuesday afternoon, when the lender was still working on a fix. "We are working with great urgency to ensure that the affected credit reports are corrected quickly; in fact, we expect full resolution within the next day. Once the issue is resolved, the payment histories will appear as they would absent our error."

Federal law prohibits creditors from reporting false information to credit bureaus and allows consumers to sue for up to $1,000 for violations. It's unclear, though, whether a goof such as this one qualifies as a violation of the law, particularly if the problem is fixed soon.
Such a serious drop in credit scores can cause havoc on a borrower's finances. Credit card companies may jack up interest rates in response to a plunging score, and insurance companies may increase the premiums they charge. Borrowers may be denied other credit or charged more because of their lower scores.

Sallie Mae markets the graduated-payment student loans as an option for borrowers who are just starting their careers or who need lower payments because of economic setbacks. Borrowers are allowed to make reduced payments in the initial years of the loan, sometimes paying just interest for up to four years before larger payments kick in.

Working on a solution

News of the blunder began circulating last week on Internet user forums, including CreditBoards.com, and spread as more borrowers checked their scores or were notified by subscription credit monitoring services that their FICO scores had changed.

One borrower, who preferred to remain anonymous, found the error had dropped his Equifax FICO score to 660, while his score remained 782 at TransUnion and 820 at Experian. After Sallie Mae announced the fix, his Equifax score zoomed back to 789.

If you have a graduated-payment loan from Sallie Mae and are concerned it may hurt your credit, here's how to find out whether you've been affected and what to do about it:

• Obtain a copy of your Equifax credit report, which is available once a year for free from AnnualCreditReport.com. If your Sallie Mae loan account includes a note under the "Descriptions" heading reading, "Arrangements made with credit grantor to make partial payments," your credit has likely been affected -- even if the account shows "paid as agreed" elsewhere on your report.

• Take a look at your actual FICO scores, which are typically not available for free. You can buy your Equifax FICO score from Equifax.com or MyFICO.com for $15.95. For comparison purposes, you can buy your FICO scores from Experian and TransUnion, at MyFico.com for $15.95 each (those two bureaus don't sell FICO scores directly to the public)
• You can dispute the erroneous description directly with Equifax by using the link provided with your credit report. Make it clear in your dispute that the account is not delinquent and is being paid as agreed.

• If you're having a problem with a loan or other credit account because of the Equifax glitch, Sallie Mae has promised to provide help. "We recognize that some customers may need a credit reference during this interim period, and we will gladly and promptly supply one to assist them," Sallie Mae's Holler wrote. "Anyone with questions about their Sallie Mae account may contact us at 1-888-2-SALLIE."

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10 ways for Missouri and Illinois consumers to curb sleazy debt collectors

The math in recessions is simple: More folks are unemployed; more folks fall behind; fewer folks are able to pay their debts once they get behind.  This time, many people can't even borrow against their home equity to pay the bills.

It's tough conditions like these that tempt collectors to get rough with consumers. Given that the debt-collection industry has trouble restraining itself during good times, you can imagine how bad this could get. Consider:

• Complaints about collection agencies quadrupled between 2001 and 2007, the latest data available from the Federal Trade Commission. One in five complaints received by the federal agency concerned collectors, and the total of 70,951 exceeded that of any other industry.

• Consumers most commonly complained that collectors misrepresented the character, amount or legal status of a debt -- demanding far more than was owed, insisting the consumer owed a debt that he or she did not, or claiming a debt was legally enforceable when the statute of limitations had long since expired. Other common complaints: that collectors violated laws against harassing consumers and using obscene language, that they falsely threatened dire consequences, such as jail time, and that they contacted consumers at work.

• You no longer have to be a debtor to wind up the target of a collector's harassment. A booming market in old and often poorly documented debts means that in some cases collectors are going after the wrong people with a vengeance.

• The industry itself realizes it has a public-relations problem that's likely to get worse. ACA International, a trade group that represents collectors, unanimously approved a first-ever code of ethics last year, and the head of one of the country's largest collection agencies has warned his colleagues that a public backlash could spoil the coming boom.

'Fresh' debts at 12 cents on the dollar

Vikas Kapoor, the chief executive of call-center company IQor, told a gathering of collection-agency executives in November that the industry needed to better comply with existing laws and improve the public's perception of collectors, according to insideARM, a newsletter that covers the industry.

In particular, Kapoor said, collection agencies should stop buying debt that hasn't been properly documented -- the kind of debt that triggers a lot of consumer complaints and lawsuits -- and should find a way to punish individual collection-agency employees who repeatedly violate fair-debt-collection laws.

These are fine ideas, but I'm not sure we can count on collectors to get their act together as the recession rolls through the economy. There's too much money involved and too little oversight to expect that collection agencies won't cut corners.

The boom has already begun. Sales of overdue credit card debts, already more than a $100 billion industry, are on the rise, and prices are dropping, reflecting both the increase in supply and the growing difficulty of getting borrowers to pay up in a worsening economy.

The price of "fresh," or recently charged-off, credit card debts has dropped between 10% and 30% in the past year to 9 to 12 cents on the dollar, according to Mark Russell, a director at collection-industry consulting company Kaulkin Ginsberg.  Older debts, for which two or more collection attempts have been made, have slid between 25% and 40%, Russell said, to 3 cents to 5 cents on the dollar.

Meanwhile, collectors are gearing up to go after these debts. The debt-collection industry has added 100,000 jobs in the past year, according to Kaulkin Ginsberg, bringing employment to more than half a million positions. The growth rate is expected to continue: The U.S. Bureau of Labor Statistics predicts employment in this industry to grow 23% between 2006 and 2016.

So now is the time to act. I have five suggestions for ordinary people dealing with collectors.  If you're contacted by collection agencies, you should:

Know your rights. Whether or not you owe money, debt collectors are required to treat you civilly and to obey debt-collection laws. The FTC has information on the Fair Debt Collection Practices Act, and the Privacy Rights Clearinghouse has prepared a fact sheet for consumers dealing with third-party debt collectors. Abusive language, threats to have you arrested and repeated calls are clear violations of debt collection laws; you can report them to the FTC, sue the offenders in small claims court, or both.

Understand the statute of limitations in your state. Your biggest risk if you owe a debt is that a collector will sue you, win a judgment against you (which damages your credit) and succeed in garnisheeing your wages. Your state's statute of limitations is supposed to prevent such lawsuits after a certain number of years (usually three to six years, but in some states it's longer). If the collector files a lawsuit after the statute has expired, you still need to show up in court to point that out.

Stop the calls. Whether or not you owe a debt, you want a paper trail to preserve your legal rights. In your initial contact with a collector, get the company's name, its address and a telephone number. If you're willing to pay the bill, tell the collector you want the company to send you the required proof that you owe the debt. If you're not the debtor, send a certified letter, return receipt requested, telling the collector it has the wrong party and to stop contacting you. (Sending such a letter if you do owe the debt can sometimes trigger a lawsuit, so tread carefully here.)

Keep an eye on your credit reports. You can get free annual peeks at all three of your credit bureau reports at AnnualCreditReport.com. (Make sure you go to the right site; other sites offer credit reports for a fee or as an inducement to sign up for credit monitoring.) Dispute any bogus collection accounts immediately and include any proof you have, such as police reports of identity theft or copies of letters you sent to the collection agencies.

Get help. If a collector continues to call, seek help. The best place to turn may be an attorney who is familiar with debt-collection laws. No money for a lawyer? Try your state attorney general's office.

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Bankruptcy Filings Expected to Soar as Economy Slides - Steady Increase in St. Louis Bankruptcy Filings

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Protect Your Credit In An Economic Downturn

Great credit is a powerful weapon in a struggling economy. Here are seven strategies for preserving yours. 

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Foreclosure Assistance for Missouri and Illinois lost as Senate drops bankruptcy aid from housing plan

WASHINGTON - Republicans and business-friendly Democrats on Thursday scuttled a plan to give people threatened with losing their homes more leverage in winning favorable loan terms from their lenders in bankruptcy courts.

The Senate killed the bankruptcy plan by a 58-36 vote on the first full day of debate on a bill designed to boost the slumping housing market.

The Democratic-backed bankruptcy law changes, opposed by banks and their GOP allies and a handful of Democrats, would have given judges the power to cut interest rates and principal on troubled mortgages to help desperate borrowers trapped in subprime mortgages keep their homes.

The idea was to give borrowers duped into abusive mortgages leverage in getting their loan terms adjusted. Such power, said the plan's chief proponent, Sen. Dick Durbin, D-Ill., would have helped "more people than all of the provisions combined" in the rest the bill.

But Republicans and 10 Democrats, along with Connecticut independent Joe Lieberman, voted to scuttle the bankruptcy provision. Opponents argued that, despite modifications by Durbin, the proposal would hurt more than it would have helped by leading mortgage lenders to ratchet up interest rates and thereby put another drag on the soft housing market.

The defeat of the bankruptcy plan highlighted a weakness that many people find with the bill _ that it showers generous tax breaks on money-losing businesses like home builders but does little to help people facing foreclosure.

The measure is advertised as helping people keep their homes and injecting demand into the teetering housing market. But its most costly provision simply gives tax cuts worth $25 billion over the next few years to businesses like home builders and banks.

Meanwhile, it provides just $3 billion in tax relief to homeowners over the same period, according to an estimate by the Joint Tax Committee, which explores for lawmakers the effects of tax legislation on the Treasury.

The benefits to businesses also dwarf the $4 billion in the measure that would be provided to cities and towns to buy up and refurbish foreclosed and abandoned homes. That provision is aimed at stabilizing communities and preserving values of neighboring homes.

Homeowners would benefit from $100 million to provide counseling to people threatened with foreclosure and help them in negotiating with their lenders. The measure also would provide new authority for states to issue $10 billion worth of bonds to be used to refinance subprime mortgages.

The bill opened to unenthusiastic reviews among many Democrats. House Speaker Nancy Pelosi, D-Calif., promised improvements when the House takes up the measure and negotiates a final bill with the Senate.

"Hopefully the balance will swing more in favor of the families in danger of losing their homes," Pelosi said.

The tax provisions in the measure enjoy sweeping support but deliver the bulk of their benefits to businesses _ regardless of whether they're involved in the housing market _ that are losing money in the current downturn.

Such businesses would be allowed to deduct current losses against taxes paid up to four years ago, when times were profitable. The current limit is two years of such operating loss "carrybacks."

The tax breaks, said Jerry Howard, the chief executive at the National Association of Home Builders, would provide smaller home builders with an infusion of capital that would allow them to stay in business.

The home building lobby has great power on Capitol Hill, but plenty of detractors as well, as do the banks who are currently suffering losses and also stand to benefit.

"Our goal ought to be preventing foreclosures, not just propping up home builders and big lenders," Durbin said.

"It's just a giveaway," said Sen. Judd Gregg, R-N.H.

The four tax provisions would cost $28 billion through the end of 2010, but would deliver just $1 billion in immediate relief this year.

"When they unveiled the package, the main theme was ... 'help families keep their homes,'" said Bob Greenstein, who heads the Center on Budget and Policy Priorities, a liberal think tank. "Three of the four provisions would do little or nothing to accomplish that goal."

The bill also would provide a temporary $7,000 tax credit awarded over two years to people buying foreclosed homes in the year after the bill is enacted. It would cost about $1.6 billion, which assumes about 240,000 home buyers would benefit from the credit.

The bill attracted several amendments to cut taxes further, including a plan by Sen. Ben Cardin, D-Md., to give a temporary $7,000 credit to first-time home buyers and a plan by Sen. Norm Coleman, R-Minn., to let homeowners who are late on their mortgage payments withdraw money penalty-free from their retirement accounts to avoid foreclosure.

The measure contains a broader rewrite of Federal Housing Administration law that would permanently raise the dollar limit on mortgages that FHA can insure to $550,000 in the most costly real estate markets. The economic stimulus bill approved by Congress in February temporarily raised the limit from $362,790 to $729,750.

But Republicans rebuffed efforts by Democrats and the White House to reduce down payments on FHA-insured loans. Instead, the down payment requirement would be raised to 3.5 percent from 3 percent. Democrats sought to lower it to 1.5 percent.

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Employers cut 80,000 jobs in March

WASHINGTON - Employers worried about recession slashed 80,000 jobs in March, the most in five years and the third straight month of losses.

At the same time, the national unemployment rate rose from 4.8 percent to 5.1 percent, the clearest signal yet that the economy might already be contracting. The new snapshot of the job market, released by the Labor Department Friday, underscored the damage that a trio of crises —in the housing, credit and financial sectors — has inflicted on companies, jobseekers and the economy as a whole.

The unemployment rate was the highest since September 2005, when significant job losses followed the devastating blows of Gulf Coast hurricanes.

Job losses were widespread in March. Construction, manufacturing, retailing, financial services and various business services all racked up losses. That overwhelmed gains elsewhere, including in education and health care, leisure and hospitality as well as in government.

The new employment figures were much weaker than economists were expecting. They were anticipating a drop of 50,000 payroll jobs and the unemployment rate to rise to 5 percent.

The 5.1 percent rate is relatively modest by historical standards, but was nonetheless the highest in more 2½ years.

Job cuts in both January and February turned out to be even deeper. Employers got rid of 76,000 in each month. The elimination of 80,000 jobs in March was the most since March 2003, when the labor market was still struggling to recover from the 2001 recession.

The economy is suffering the effects of a housing collapse, a credit crunch and a financial system in turmoil. That’s causing people and businesses to hunker down, crimping spending, capital investment and hiring. Those things in turn further weaken the economy in what has become a vicious cycle.

For the first time, Federal Reserve Chairman Ben Bernanke acknowledged Wednesday that the country could be heading toward a recession, saying federal policymakers are “fighting against the wind” in combating it. Many other economists and the public believe the recession already has arrived.

Economists define a recession as two consecutive quarters of negative growth.

Bernanke wouldn’t tip his hand about the Fed’s next move. However, many economists believe the central bank will lower interest rates again when they meet later this month.

The Fed has taken a number of extraordinary actions recently — slashing interest rates, providing financial backing to JP Morgan’s takeover of troubled Bear Stearns and opening an emergency lending program for big investment houses. All the actions are ultimately aimed at limiting damage to the national economy.

With a public on edge, Congress, the White House and presidential contenders are scrambling to come up with their own relief plans even as they engage in a political blame game.

With the pace of hiring slowing down, the number of unemployed people increased to 7.8 million in March; workers with jobs saw only modest wage gains at the same time.

Average hourly earnings for jobholders rose to $17.86 in March, a 0.3 percent increase from the previous month. That matched economists’ forecasts. Over the past 12 months, wages grew 3.6 percent. With lofty energy and food prices, workers may feel like their paychecks are shrinking.

Many analysts believe the economy shrank in the first three months of this year and could still be ebbing now. The government will release its estimate of first-quarter economic growth later this month.

Bernanke, however, has said he is hopeful the economy will improve in the second half of this year, helped by the government’s $168 billion stimulus package of tax rebates for people and tax breaks for businesses, as well as the Fed’s rate reductions.

Still, even Bernanke predicted this week that the unemployment rate would rise in the months ahead. Some analysts say it could climb to 5.5 percent or higher by year’s end.

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1st Annual Client Appreciation Picnic

Announcement:

1st Annual Client Appreciation Picnic

Sunday, May 18, 2008

Forest Park—Pavilion #5

12 noon till 3 pm

 

As a BIG thank you for being a part of the Castle Law family, you are invited to the 1st Annual Castle Law Client Appreciation Picnic. 

 

There will be food, fun and prizes.  We will have a bounce house for the kids and a dunk tank (if allowed by the park) where you will have a chance to get your lawyer ALL WET!  The pavilion is located next to the St. Louis Zoo, so make a day out of it in beautiful Forest Park.

 

NO alcohol is permitted!

You MUST RSVP at 1-866-570-8484

before May 9, 2008.

 

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