Riches to Rags story of tech wizard who filed Chapter 7

New York readers might be interested in the story of a man who sold his technology company for $1.8 billion only to file for personal bankruptcy five years later. The man in this story says that he now owes up to $100 million and has approximately $50 million to pay those debts. Most of his losses are alleged to be the result of bad investments in real estate and other ventures. If he chooses to file Chapter 7 bankruptcy, he will be able to start over with a clean slate. He will not be required to pay back his debts because they are almost all business-related. His petition for bankruptcy was filed in late May. It listed assets totaling as much as $50 million and debt totalling as much as $100 million. When a Chapter 7 bankruptcy is filed, an impartial trustee is appointed to administer the case. The trustee will then sell off the assets to help pay for the debts. There are different types of bankruptcy options available for people with debt problems. Each type comes with different benefits or protections as well as drawbacks. Several factors influence which type of bankruptcy is most appropriate for a given… Continue reading

Total number of bankruptcy filings have decreased since last year

New York residents may be interested to hear that the total number of bankruptcy filings in May have decreased by 12 percent from last year. Commercial Chapter 11filings decreased by 25 percent, from 716 filings in May 2012 to 537 filings in May 2013. Total filings have also decreased four percent from April 2013, totaling 96,430 filings versus 100,732 from the previous month. Chapter 11 filings decreased from 704 filings in April 2013 to 537 filings in May 2013, a decline of eight percent. The average total bankruptcy filing dates have also declined from 3,534 filings in May 2012 to 3,111 filings in May 2013, a 12 percent decrease. New York is not listed among the top five states with the highest per capita bankruptcy filing rates. The Executive Director of ABI, a company that helps to provide up-to-date bankruptcy filing data, believes that the numbers will only continue to decline. Lower interest rates, decreased consumer spending and tighter lending standards have allowed both consumers and businesses to keep their finances in check. Many small business owners may be facing pressures from increasing debt. They have the option to file Chapter 11 bankruptcy, which protects them from creditors. An experienced… Continue reading

Using Chapter 7 and Chapter 13 bankruptcy to modify mortgages

New Yorkers who have some unsecured debt and are behind on their mortgage may be able to file for Chapter 7 bankruptcy targeted towards their unsecured debt. This will allow the individual to remove unsecured debt without otherwise affecting their mortgage loan. However, the individual or household will not necessarily be able to modify their mortgage loan on this basis, which means that they may need to figure out a way to catch up on any unpaid mortgage payments. One way that a person may be able to do this is by filing Chapter 13 bankruptcy directly after their Chapter 7 bankruptcy. Chapter 13 bankruptcy allows a person to enter into a structured payment plan to resolve any old debts. A household will not have remaining debt after filing Chapter 7 besides their mortgage payments, so the Chapter 13 bankruptcy will only affect the bank balance that they owe on their mortgage payments. However, this method does come with some risk. When using Chapter 13 bankruptcy to manage past mortgage payments, the homeowner will have to pay both the payment plan and their existing mortgage payments. If the homeowner was already having difficulty making their mortgage payments, then this plan… Continue reading

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