Bankruptcy Reader

By Priya Jestin, Staff Writer

I couldn’t resist the title. And nor can I resist this statement: There was one Tower, which fought bravely but couldn’t fight its destiny. And then there was a Tower that fought against all odds and is now ready to rise like a Phoenix from the ashes.

Okay guys, I’m sorry for letting myself go. But what does one do when you cannot get over a Tower hangover. Fine, getting on with the topic, I’m talking about Tower Automotive Corp now and not Tower Records. Kathleen Ligocki, president and chief executive of Tower Automotive Corp. recently announced that the firm was ready to emerge from bankruptcy. Three creditors are supposed to have agreed to invest up to $250 million to help restructure the company.

According to the restructuring plan, the senior secured debt would be refinanced and paid in full. All allowed administrative and priority claims will also be paid in full. A few unsecured creditors would be entitled to cash and can buy shares in the new company. Tower is one of 13 auto suppliers that filed for bankruptcy in the last five years, and one of six companies on a 2005 filing roster that included Delphi Corp. and Collins & Aikman Inc. Wish there were some Good Samaritan to save Tower Records too.

By Priya Jestin, Staff Writer

Credit card debt is a painful reality and we must find ways to deal with it. While throwing away your credit card or hiding it is an option, we must look at more long-term solutions. Solutions that will help us save a thousand or more dollars on credit cards. Here are a few suggestions:

• Lower your credit card interest rates and bills by paying off your entire bill each month.
• Wherever possible, use a check, cash or debit card for purchases. This way, you cannot spend more than you’ve got.
• If your balance is too large and you are finding it difficult to pay it off, you can try this method — pay as much as you can. Then go in for a card with a low APR (annual percentage rate).
• Reduce credit card fees by getting rid of all but one or two cards, and by avoiding annual, late payment, and over-the-credit limit fees.

By Priya Jestin, Staff Writer

You’d think that only in the developing countries were pensioners and other seniors got a raw deal. Developed countries like the US of A and UK were miles ahead when it came to caring for our seniors. Well, you can think again. Here’s one instance of extremely highhanded behavior, which just asks to be condemned.

A recent report in the Herald highlights the plight of an elderly man in the UK who was forced to the brink of bankruptcy by his council’s demands for care home costs. A man signed over his property to his son, without payment, nine years before moving into a care home.

The council calculated the value of the house as part of the father’s assets. This resulted in much higher care home costs for the poor old man. This, when the public purse is supposed to pay for care and nursing costs. The main reason this happened was because of a rule, which says that individuals reckoned to have the means are still liable for the cost of renting their room and for food. So, the house that this elderly man gifted away was added onto his list of assets to determine his means.

The Archdiocese of Portland recently filed a new bankruptcy plan with the US Bankruptcy Court. This new plan was in anticipation of a payment of $75 million to settle outstanding sex abuse claims against some of its clergy. According to the new plan, over $40 million will go to 143 people, and another $14 million has been set aside to cover claims by around 26 more people who may not have sued or settled.

The church has also set aside $20 million as a contingency fund. This fund is expected to cover any future claims. Insurance will cover over $50 million. The church expects to raise the remainder amount by liquidating some of its holdings. This will not include the parish or school property.

The Portland archdiocese holds the distinction of being the first one to file for bankruptcy in the face of civil litigation over sex abuse claims. Sorry, I’m not trying to be disrespectful here. It’s just that sexual abuse by one or a few priests affecting an entire archdiocese is not fair. I mean it is not fair to the congregation. And the best thing the Vatican and the churches can do is ensure that justice is delivered quickly.

According to the lawsuit, which was filed in 2002 the Vatican, the Archdiocese of Portland and the archbishop of Chicago allegedly conspired to protect a priest by transferring him from city to city, even though the church knew he had a history of committing sexual abuse.

“I will file bankruptcy, and start everything all over again”, if this thought has been there in your mind, the only thing I would do is shoutting Heeellllllloooooooo!!! Sharp and shrill in your ear. Filing bankruptcy is not that easy, it is like filing invitation for a life-long damage to yourself.

Bankruptcy is listed as top-five negative events that affect our life. For a moment, you may feel as though you have done a smart job. But bankruptcy is like a boomerang that keeps reverberating in your life. Job and loan application often ask if you have ever filed for bankruptcy. In case you lie thinking that bankruptcy stage is history in your life, then you are gone, and you are left ‘BANKRUPT’.

–by Priya Jestin, Staff Writer

I may not be too off the mark if I said that most of us don’t know much about secured credit cards. Probably we don’t consider it too important or we don’t realize the necessity of knowing the difference between secured and unsecured cards.

The big difference between a secured credit card and an unsecured credit card is that a savings deposit serves as collateral for a secured credit card. So, if you need a secured credit card, the first thing you need to do is deposit money into a savings account. A secured card is good for people who have a less than perfect credit history. As you pay your bill on time each month, it helps you build a positive credit history.

When shopping for a secured card, you must ask the issuer to explain their policies regarding credit bureau reporting. When the bank reports on your positive payment record, it helps build a good credit history with the credit bureaus.

–By Priya Jestin, Staff Writer

Credit card statements are not the prettiest of sights — and that’s putting it lightly. Most of us are quite intimidated by just the sight of a credit card statement. But it’s even worse trying to read and understand the document. However, once you come to grips with the statement, you can actually use this information each month to stay in control of your finances. I’m not teasing you, so please… stay with me.

Firstly, you need to understand why there is SO much information on your credit card statement. Actually, you can blame the government for it. The Fair Credit and Charge Card Disclosure Act, which is actually designed to protect you, requires creditors to provide you with certain data on a regular basis. This means that this information is beneficial to you and can actually help you make decisions about using credit.

The first thing you should do when you receive your credit card statement is check the interest rate and fee schedule information. This will let you know certain things like annual fee, APR, late payment fee, etc. Preview your statements each month to ensure you stay in control of your finances.

What’s one to make of this recent bit of news that total bankruptcy filings jumped by 9.8% in the third quarter compared to the prior quarter, but, remain well below year ago levels? Are we supposed to believe that many Americans have suddenly found themselves to be flush with money so that they can be finally free of creditor bondage?

According to recent data released by Cardweb.com, during the third quarter total filings hit 171,146 compared to 155,833 for the second quarter and 542,002 one-year ago. While this was great news, it was a bit tempered with another foreboding news. Forecasts predict that there could be an increase in U.S. corporate bankruptcies by 17% in 2007. Well, we can probably take consolation in the fact that at least for now things are fine; or are they? Just a niggling doubt that refuses to go away: Are these figures telling the truth?

–By Priya Jestin, Staff Writer

The fact that it took the judiciary so long to understand that the new bankruptcy law passed in 2005 was flawed is the only thing that amazes me. I mean we all knew that there was something wrong with it and if I remember well, I’ve been harping on it for nearly a year now myself. So why did it take so long for this US district court judge in Minneapolis to rule that a portion of the new U.S. bankruptcy law unfairly restricted attorneys and violateed the First Amendment.

All we can say is that at least Judge James Rosenbaum decided to speak up. So what prompted this decision? According to the judge, a part of the law ‘forbids truthful and possibly efficacious advice” from an attorney to a client.’ The judge wanted to know, “If this is the government’s view of legal ethics, it is a form of ethics unfamiliar to the Court.”

What Rosenbaum’s ruling addressed was a provision in the new law that said attorneys couldn’t advise their clients to take on more debt as the clients consider filing for bankruptcy.