On Dec. 3, sources reported that a New York hearing resulted in a deal being struck in an ongoing Chapter 11 case involving Residential Capital LLC. The mortgage lender initially entered bankruptcy in May 2012, but its plan to exit this status was previously blocked by a number of bondholders. Reports said that before filing, the company serviced more than $374 billion in residential mortgage loans in the U.S. alone. Observers said that with the bondholder issues largely settled, the firm will be able to get out of Chapter 11 status before 2014. As a result of the exit plan, ResCap would be able to start repaying a number of creditors, including some who lost money on collapsed securities during the lending crisis of 2008. Bondholders initially wanted to recover around $340 million in post-bankruptcy interest in addition to the $2.2 billion they were already slated to receive in principal and pre-bankruptcy interest. One attorney representing the bondholders noted that although his clients weren’t obligated to change their votes to approve the plan or receive payments, they wouldn’t be afforded legal releases if they didn’t. Bankruptcy proceedings can become complex as creditors change their demands in order to recoup their… Continue reading
While New York residents may run up debt in a number of different ways, including home, automobile and student loans, but credit card debt is still the most common reason people file for bankruptcy. According to a recent survey, nearly one-third of the respondents cited credit card debt as their reason for filing, with the next two most common reasons being home foreclosures and job losses. The survey also found that a large majority of consumers had filed for bankruptcy under Chapter 7 compared to Chapter 13. While people commonly filed for bankruptcy for various reasons, approximately 20 percent of the respondents were concerned about the impact on their credit rating. It is important to note that while a bankruptcy will put a mark on someone’s credit report, people are now able to start rebuilding their credit almost immediately after filing. With the increase in popularity of prepaid and secured credit cards, consumers can quickly begin developing a payment history that helps to boost their credit score. In some cases, many individuals are able to successfully obtain new credit within a few years of filing for bankruptcy. There are a variety of benefits to filing for bankruptcy, and it can… Continue reading
Some New York homeowners who are struggling to make ends meet or facing a foreclosure may choose to file for bankruptcy. The advantages of doing so are that people can reorganize their debt and, in some cases, even have unsecured debt discharged. With a Chapter 7 bankruptcy, unsecured debt such as credit card balances can be written off and people are not required to pay any additional money to creditors. However, if someone does not meet the requirements for a Chapter 7 filing, often due to making to much money, a Chapter 13 filing may still help debtors keep their homes under certain circumstances. A Chapter 13 bankruptcy generally allows debtors to renegotiate the way they pay off their obligations. They are assigned a court appointed trustee, and the trustee will work with the individual to set up a payment plan as well as accepting and distributing these funds to creditors on a monthly basis. While people are given a greater amount of time to pay off loans, they will need to make their current payments as well as putting money towards missed payments. This can become burdensome, even if the home has been refinanced. Debtors in this position may… Continue reading
Bold labels are required.