Generally, the bankruptcy code outlines which debts can be discharged, however, courts do have some authority in the event of severe hardship. In Chapter 7 and Chapter 13 bankruptcy, most unsecured debts, including credit card and medical debt can be discharged or reorganized, while secured debts, including student loans, taxes, and judgments must be paid in full. A new bill is calling on legislators to pass new regulations that would also allow the discharge of private student loans in bankruptcy. Many students in New York and nationwide are burdened by high rates of unemployment and a challenging job market as well as extremely high student loan debt with accumulating interest. In the current economy, many young people are indebted to private lenders and unable to recover, even after filing bankruptcy. While many federal loans have fixed interest rates and the ability to defer payments, many students who take on private student loan debt have no relief in the event of hardship. A recent survey found that many students who took out private loans didn’t know the difference between private and government loan debt. In the proposed new bill, colleges and universities would be required to inform students about federal aid options, including… Continue reading
There will be one less charter flight company servicing the East Coast. Fleet Aviation LLC, which operates out of Westchester County Airport in New York and serves vacation destinations like Martha’s Vineyard, Nantucket and the Hamptons, has filed for Chapter 7bankruptcy. As a result, the company will cease to exist and its assets will be liquidated to pay off debt. Fleet Aviation has had its share of troubles recently. In August, the U.S. Attorney’s Office in Manhattan sued the carrier for violating federal aviation regulations, alleging it used an unqualified pilot on numerous flights in 2008 and 2009. That lawsuit was settled when the company agreed to pay a fine of $40,000. Earlier in the year, the company’s CEO resigned. In its bankruptcy filing in U.S. Bankruptcy Court for the Southern District of New York, the company listed up to $50,000 in assets and up to $500,000 in debt. Chapter 7 for businesses is a measure used when a business has overwhelming debt and can no longer operate profitably. Once Chapter 7 bankruptcy is filed, all collection actions stop. The court then appoints a trustee to sell the company’s assets and pay off debt to creditors and investors based on… Continue reading
Hostess Brands, the maker of such iconic brands as Twinkies and Ding Dongs, has asked a federal bankruptcy judge for permission to cease its operations and liquidate the company’s assets underChapter 7 bankruptcy. While this may not mean the end of the company’s beloved snack cakes — the brands likely will be sold at auction — it will mean the end of employment for nearly 18,000 Hostess employees. Hostess has had financial challenges for some time. The company first filed for bankruptcy protection in 2004 and then again in January 2012. Those earlier bankruptcy proceedings sought to reorganize the company’s debt under the initial filings. The company’s most recent filing seeks asset liquidation under Chapter 7. It comes after a failed effort to gain concessions from union workers. When union negotiations broke down, Hostess unilaterally imposed cuts in wages and benefits. That action resulted in a strike at 24 of the company’s 33 plants, and striking workers refused to return to work by a Nov. 15 deadline set by the company. Hostess officials now say the company does not have the financial resources to continue operations in the face of the strike. Chapter 7 for businesses is a measure taken… Continue reading
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