President of Aviation Group Files Personal Bankruptcy to Save Company


Financial distress often leads savvy Americans to take unique measures to save their fledgling companies. And the recent case of a Maine businessman who filed bankruptcy to save his company is a prime example.

According to sources, James Horowitz recently transferred the assets of his company, Oxford Aviation, to himself so he could file for bankruptcy and save his company from the hands of his creditors.

Airline President Files Bankruptcy to Save Company

According to a report this week from the Lewiston Sun Journal, Jams Horowitz transferred all of the assets, inventory, and leasehold interests held by his company, Oxford Aviation, to himself on November 12.

The transaction reportedly place for a single dollar, sources say. On the same day, Horowitz then took the novel step of filing for Chapter 13 bankruptcy in a U.S. Bankruptcy Court.

Sources say Horowitz took this relatively drastic step in response to an eviction attempt by Oxford County, Maine, which has tried to boot the company from the 40,000-square-foot hangar it leases at the Oxford County Regional Airport.

This attempt, apparently, was almost successful, as Oxford County reportedly obtained a forcible entry and detainer, which is the formal name for a court’s approval of an eviction action. Sources say the county claims Oxford Aviation has breached 11 terms of its rental contract.

But by placing the aviation company’s assets under his own name, and then filing for bankruptcy help, Horowitz has put the county in a difficult situation. Bankruptcy’s automatic stay immediately halts all collection actions, so the county might try to pursue its claim in bankruptcy court.

Aviation Company President Files for Chapter 13 Bankruptcy

Sources say Oxford Aviation, which repairs and refurbishes older aircraft, was founded in 1989 and currently employs up to 60 workers, but its future remains a bit unsettled after its founder’s bankruptcy filing.

Still, by filing bankruptcy, Horowitz has given himself extra time to consider his options. And according to his bankruptcy attorney, the president of the company is actively seeking a buyer.

Horowitz’s attorney recently told sources that his client filed bankruptcy to stop the eviction and “preserve the value of the lease.” In addition, Horowitz’s intention is to “sell the company as a whole, to a buyer, and use the proceeds, hopefully, to pay creditors down,” said his attorney.

During the bankruptcy proceeding, Oxford Aviation will reportedly continue to fix the planes it has on site, but will not accept new clients, according to reports.

Aviation Company May Set Record by Filing for Fourth Bankruptcy


Global Aviation Holdings is not a particularly famous entity, but it could set a remarkable distinction if it goes through with its plan to file a fourth bankruptcy, according to a report from Fox Business.

Sources say the company, which is a major provider of commercial charter airline services to the United States military, is planning to file for debt relief, and it likely won’t have to do much searching for its Chapter 11 bankruptcy lawyers.

Aviation Servicers Group Files for Fourth Bankruptcy

According to sources, Global Aviation has already filed three bankruptcies since 2004. The company blames its struggles on cutbacks in government spending, according to its petition recently filed in the U.S. Bankruptcy Court in Wilmington, Delaware.

Sources note that Global Aviation, or companies with the same assets under a different name, previously filed for bankruptcy in 2004, and again in 2006 in the Eastern District of New York.

A subsidiary of the company, ATA Airlines, reportedly filed for bankruptcy in Indiana a few years ago, according to sources tracking the company’s recent financial saga.

Sources note, however, that multiple bankruptcy filings are relatively common for companies. In fact, roughly 33 percent of large companies that file for bankruptcy end up going through the bankruptcy process again within four years.

These return debtors, according to Edith Hotchkiss, a bankruptcy researcher at Boston College, are sometimes cheekily referred to as ‘Chapter 22s,” sources note.

Fourth Bankruptcy Filing Could Set Record

Despite the fact that two bankruptcy filings occurs with some frequency, a third bankruptcy filing is relatively rare, even for companies struggling with their finances after a pair of bankruptcies.

According to Edward Altman, a professor at New York University, at least 10 companies have filed for three separate bankruptcies. These unfortunate entities include two airline companies, Global Aviation and TransWorld Airlines, as well as two retailers, Grand Union Co. and Levitz Home Furnishings Inc.

Four bankruptcy filings, however, have never befallen a single company, at least under the revised U.S. Bankruptcy Code, according to Altman’s research.

Altman did acknowledge that Trans Texas Gas Corp. filed for its fourth bankruptcy in 2009, but its first bankruptcy was filed before 1978, when the Bankruptcy Code was heavily revised into something completely different.

Interestingly, famed investor and reality television star Donald Trump has had four different entertainment businesses file for bankruptcy help, but these were all four separate hotels, and not held as the same company.

Experts Say Credit Card Debt Could Deplete Your Retirement Savings


Financial advisers are starting to warn consumers that excessive credit card debt could start to deplete their retirement savings, according to a report this week from Business Insider.

The conventional wisdom, sources say, is that debt doesn’t typically affect retirement savings, which are generally safe from creditors when a personal files for bankruptcy. But there are other ways your retirement fund could be affected.

Retirees Should Also Focus on Limiting Credit Card Debt

According to reports, retirement advisers typically focus on designing a robust plan, including factors like increasing employer contributions, lifting worker compensation rates, and selecting an appropriate range of safe investments.

In addition, financial planners who cater to clients with 401(k) plans try to sweeten the pot by adding their own fiduciary services on other financial matters, which certainly makes sense, but may not be as effective as a much simpler tactic.

In brief, financial experts believe that retirement planners should spend more time educating their clients on avoiding the most common types of burdensome consumer debt.

Sources say, for example, that high rates of credit card debt and home loan debt are the biggest factors preventing American workers from saving for retirement.

“There needs to be a holistic approach,” said Philip White, the former director of the employee benefits program at Rackspace Inc., an information technology company. “You can put 10% of your salary into your 401(k), but if you’re adding to your debt at a 12% rate, then you’re getting nowhere.”

Credit Card Debt Takes Bite Out of Retirement Accounts

Indeed, workers who outpace their savings with debt are doing themselves a disservice. But this scenario is more common than you’d think. Today, worker debt is growing faster than retirement savings across the entire economic spectrum.

According to sources, nearly two-thirds of workers who participate in defined-contribution retirement plans are adding debt at a faster rate than they gather retirement savings. This figure is up from only one-half of workers seven years ago.

Unfortunately, financial advisers tend to gloss over seemingly minor issues like personal debt when discussing retirement plans. According to Matt Fellowes, the leader of HelloWallet, there “is quite a bit of regulatory pressure for advisers to focus on investment allocation and fund lineup issues.”

And until financial advisers are more willing to focus on more mundane matters, like credit card debt, or excessive home loan spending, Americans may continue to lose the important savings race.

Las Vegas Helicopter Tour Company Files for Bankruptcy Help


The recession spared few cities, but one of the hardest-hit areas over the past few years was the Las Vegas region, which relies on a constant influx of tourist dollars to keeps its many businesses afloat. During the recent economic collapse, many Las Vegas businesses were forced to file for bankruptcy.

This trend was illustrated again this week when Heli USA Airways Inc., one of the largest sightseeing agencies in Las Vegas, filed for Chapter 11 bankruptcy, according to a report from the Las Vegas Review-Journal.

Las Vegas Helicopter Tour Agency Files Bankruptcy

Sources say the company’s bankruptcy petition, which is relatively common paperwork filed with every debt relief case, listed assets and debts worth less than $50,000, and did not include a list of the company’s creditors.

This bare bankruptcy petition, however, will need to be supplemented with additional information in the coming week, especially the name and address of the company’s creditors, according to a local bankruptcy lawyer.

According to reports, the bankruptcy filing was precipitated by the 18-year-old company’s inability to make lease payments on three helicopters it purchased from AugustaWestland Philadelphia Corp., the manufacturer that sold it the choppers.

The automatic stay will stop the pending collection action related to the unpaid helicopter bills. As such, the company’s bankruptcy lawyer says the bankruptcy filing will allow the company to “get all our ducks in a row and get all the issues resolved in one location.”

Las Vegas Company Uses Automatic Stay to Stop Creditor

According to the company’s primary creditor, Heli USA defaulted on its helicopter payments, which amounted to a staggering $32,000 per month, a year ago. The manufacturer also alleges that Heli USA has failed to maintain the aircraft, which has increased the “danger that the aircraft will suffer serious harm.”

Interestingly, the lender’s fear that Heli USA could transport the helicopters across state boundaries prompted them to seek a restraining order from a state judge. This order was granted, which has temporarily grounded the three aircraft.

Company officials, however, deny that they have damaged any of the helicopters, and claimed in court documents that they stopped making payments because the manufacturer failed to equip the choppers with special windows and in-flight entertainment systems, as it allegedly promised.

The turmoil has put a significant dent in the revenues of Heli USA, which is reportedly the second-largest helicopter touring company in, and transports tens of thousands of customers through the Las Vegas sky every year.

Casey Anthony Settles Lingering Chapter 7 Bankruptcy Dispute


Casey Anthony moved one step closer to closing her personal bankruptcy case after she and her bankruptcy attorneys agreed to a settlement with the firm that searched for her missing daughter in 2008.

The settlement means that one more obstacle has been removed in Anthony’s search for a clean bill of financial health after her murder trial depleted her bank account.


Casey Anthony Nears Completion of Chapter 7 Bankruptcy Case

When debtors file for Chapter 7 bankruptcy, creditors are allowed to object to the discharge of their debts. In many bankruptcy cases, creditors simply ignore the proceedings, but in certain high-profile cases involving large sums of money, creditors go to bankruptcy court, too.

And Anthony’s case was one of these exceptions. According to a report from The Orlando Sentinel, three different creditors filed complaints in bankruptcy court that objected to the discharge of certain of Anthony’s debts.

The most notable creditor pursuing Casey Anthony in bankruptcy court was Texas EquuSearch, a search-and-recovery group that reportedly searched for Anthony’s daughter in Central Florida in 2008.

In documents filed with the bankruptcy court, the group claimed it spent more than $100,000 search for 2-year-old Caylee Anthony, while Anthony knew all along that her daughter was dead.

Sources say the company successfully argued in court that it was entitled to some of the proceeds. In a settlement reached this week, Anthony agreed to allow EquuSearch to claim a $75,000 debt in exchange for their promise to drop their complaint.

Casey Anthony Creditor Looks to Collect in Bankruptcy

Despite the settlement, sources speculate that EquuSearch will likely fail to recover much of the money. The company’s own bankruptcy attorney admitted to reporters that creditors in Chapter 7 “usually receive very little money, if anything.”

Of course, if the trustee handling Anthony’s estate can find anything worth some value that isn’t covered by a state exemption, the company may be able to recover some of its debt. But once the bankruptcy case closes, the entire debt will be discharged, sources say.

And EquuSearch isn’t the only creditor who will be disappointed. According to reports, Anthony listed more than $792,000 in debt in her bankruptcy filing, while reporting less than $1,100 in assets.

In 2011, a Florida court found Anthony not guilty of murder after she was accused of killing her daughter. Sources say Anthony has been living in hiding since the conclusion of her trial.

Rumors Claim Retailer JC Penney has Hired Bankruptcy Lawyers


According to a report from the Chicago Tribune, shares of J.C. Penney Co Inc. fell by a significant margin this week after the retailer allegedly enlisted the aid of bankruptcy law attorneys.

The company, however, has denied the move, although hiring a bankruptcy attorney is relatively common for corporations, even those that do not eventually file for bankruptcy.


JC Penney Reportedly Mulls Filing for Bankruptcy

Sources say shares of the venerable retailer fell by 8 percent this week after a rumor leaked that the company was considering filing for bankruptcy in order to shed its substantial debts. The shares were subject to “heavy trading,” sources indicate.

And the share prices are made more volatile by the fact that nearly a third of shareholders are betting against the company’s ability to improve its stock, which is a sign that investors are trouble by the retailer’s lagging revenues and high debt.

In response to the rumors, however, JC Penney spokeswoman Kristin Kays told reporters that there was “no truth to the rumor.” In addition, reports have not indicated the precise source of the news.

Still, there is no doubt that the retailer is in trouble. In the wake of lagging revenue, the chain made a tactical shift in 2012 by trying to appeal to shoppers with higher incomes. Traditionally, the store has been a haven for bargain shoppers.

This tactic, however, forced the company to take a significant bite out of its cash reserves, and sources say the move led to massive losses after the store spent millions on remodeling its older outlets.

JC Penney May Seek Help in Bankruptcy Court

Of course, the store’s finances were also heavily damaged by the recent recession, which forced many American consumers to cut their spending on clothing.

In addition, increased competition from online outlets such as Amazon has led more consumers to simply shop from the comfort of their homes, rather than venture to the nearest mall.

The company, however, remains confident that it will weather the storm. Sources say the company recently announced that it will have $2 billion in liquid assets by the end of the year, and that it expects sales to continue to improve as the holiday season approaches.

Only time will tell whether this optimism is warranted, or whether the company will indeed need to enlist the help of bankruptcy attorneys.

Tips on Reducing Prescription Drug Costs for Medicare Patients


Health insurance can be incredibly confusing. And while the newly mined Affordable Care Act provides some hope for patients looking to reduce their costs, it may also cause some confusion for Medicare patients, especially those who need prescription drugs.

And since medical debt is one of the leading causes of personal bankruptcy, saving money on prescription drugs could help prevent a lot of financial stress.

Prescription Drug Costs May be Trimmed for Medicare Patients

According to a recent report from CBS News, one of the primary goals for Medicare patients is to limit the total out-of-pocket expenses on prescription drugs, which can costs tens of thousands of dollars for even relatively healthy consumers.

One of the first points of attack is to look beyond your monthly premium costs. Many consumers simply look at their monthly premium costs when considering what type of prescription plan best suits their needs. This, however, is a mistake.

CBS News recommends looking beyond the premium to consider deductibles and copayments. Some of the plans that appear to be more expensive actually have lower deductibles and smaller copayments than plans that appear to be cheaper because they have lower monthly premiums.

In fact, sources say some Medicare Advantage plans that cover prescription drugs at no additional charge have massive copayments that cause real financial stress when medications are needed.

According to reports, Medicare’s website allows shoppers to compare estimated out-of-pocket expenses for various drug plans. Savvy consumers can enter their medications and compare the actual cost of each plan. This could help reduce your medical debt, which could help you avoid Chapter 7 bankruptcy.

Keep an Eye on Changes to your Medicare Plan

In addition to shopping wisely for your plan before selecting Medicare coverage, you should also beware of changes to your Medicare prescription benefits.

Every year, your prescription drug provider is required to notify you of any changes to your prescription coverage. Don’t ignore this! Check to see if your provider changed the classification of the drugs you take. If so, it could increase your costs.

Finally, another method of lowering drug costs that has stood the test of time is to simply ask your pharmacist or medical provider for help. If you’re using an expensive drug, ask your pharmacist if there is a cheaper generic product on the market.

Health care can be a financial nightmare, especially because consumers are at an information disadvantage. To maximize your financial health, make sure to do your homework on your prescription drug benefits.

Total Credit Card Debt in the United States Takes Promising Dip


The total amount of credit card debt floating about the United States took a promising dip this summer, suggesting that consumers have grown weary of adding new debt in the wake of a weakening economic recovery.

Sources say total credit card debt declined by $1.84 billion in July, which represents a drop in 2.6 percent over the same month in 2012, according to a recent report from The Wall Street Journal.

Credit Card Debt Declines as Consumers Exercise Restraint

The Federal Reserve released the latest statistics, which typically take a few months to compile, this week, and they reveal a true trend, as the total amount of credit card debt dropped by 5.2 percent in June, according to sources.

Financial analysts believe that consumers have grown weary of the lagging economic recovery, and are reluctant to take on more credit card debt. This theory is supported by the continued high rate of Chapter 7 bankruptcy filings in the United States.

And sources also believe that the decline in credit card debt means that consumers are spending less on non-essential activities, like purchasing new clothes, eating at restaurants, and attending sporting events.

But consumers are still spending in other places, sources report. For example, non-revolving credit, which primarily includes car and student loans, rose by $12.28 billion in July, representing a 7.4 percent jump from the same month last year.

So while the decrease in credit card debt could spell trouble for the economy, which heavily relies on the graces of consumer spending, Americans are still throwing money at education and transportation.

Credit Card Debt Often Leads to Bankruptcy

Ironically, the decreased consumer debt, which may lead to fewer people filing for personal bankruptcy, is good news for consumers, but lousy news for the economy as a whole.

Still, the decline in credit card debt could create a more stable economic future. Sources say credit card debt and other forms of revolving credit reached a peak of $1 trillion in the summer of 2008, right before the economy took an epic crash.

So the fact that credit card balances have dropped in three of the past five months might be good news for both consumers and the economy, provided that the figures don’t drop too far.

But while the national unemployment rate remains at a relatively high 7.3 percent, and those with jobs continue to fear for their own stability, consumers will likely continue to cut down on their non-essential spending, which will likely keep credit card use down for the foreseeable figure.

Detroit Politician Runs in Election After Filing Personal Bankruptcy


While her city wallows through the largest municipal bankruptcy in American history, a candidate for Detroit city clerk is going through her own personal bankruptcy filing, according to a report from the Detroit Free Press.

And the candidate, D. Etta Wilcox, will likely face sympathetic voters, as residents of Detroit have grown very accustomed to viewing debt with a clear, pragmatic approach.

Detroit City Clerk Candidate Files for Bankruptcy

Sources say Wilcox, who is challenging the incumbent City Clerk, Janice Winfrey in an election on November 5, filed for bankruptcy in June 2012. The candidate reportedly listed total debts of more than $625,000.

Wilcox recently told reporters she is not sure when the case will resolve, but the deadline for her creditors to object to her debt relief efforts has already passed, which suggests that her case could be resolve before election day.

According to reports, Wilcox owes more than $42,000 in credit card debt, and in a remarkable example of the effect of the recent housing crisis, she owes more than $251,000 on a house in Detroit that is only worth about $50,000.

Trying to stop home foreclosure is one of the primary reasons consumers file for personal bankruptcy, and if Wilcox is truly this far underwater on her home, bankruptcy may have been her most suitable options.

When asked if her pending bankruptcy could be a detriment to her political chances, Wilcox made a very astute observation: “Donald Trump has filed for bankruptcy any number of times, and he goes on and builds new empires.”

Indeed, filing for bankruptcy no longer carries the stigma it once does, as more than a million Americans turn to bankruptcy courts for debt relief each year.

Detroit Politician Defends Recent Bankruptcy Filing

While her bankruptcy may not severely damage her electoral chances, Wilcox does not have a particularly strong history in local elections. Sources say she has lost elections for mayor, city council, and state representative in the past.

But she remains steadfast in her pursuit of the city clerk position, saying that she wants to “restore integrity” in Detroit’s elections.

She also defended her bankruptcy filing in a very articulate fashion: “Will I allow my assets to be taken from me and find myself homeless when I know bankruptcy courts are there for that very reason — to protect our personal assets — I don’t think that would be using the talents, the skills, the intellect that I was given by God.”

Foreclosure Management Firms Come Under Attack for Illegal Tactics


Since millions of pending foreclosures have accumulated during the past four years for major banks, many lenders are looking to push consumers out of their homes as fast as possible. By doing so, banks try to reduce the likelihood that homeowners can defeat a foreclosure.

To achieve this goal lenders are hiring foreclosure management firms to bully borrowers out of their homes before they are need to leave the properties. The biggest offender, a company named Safeguard, is now under considerable scrutiny for its actions, according to a report from The New York Times.

Invasive Foreclosure Tactics Trigger Homeowner Concerns

There are hundreds of different foreclosure management firms across the country, but the largest is Safeguard, which reportedly has more than 25 million contracts. And it appears Safeguard has created some powerful enemies.

Recently, for example, Illinois Attorney General Lisa Madigan filed a lawsuit against the massive company, claiming it has wrongfully booted hundreds of homeowners out of their properties without giving them due process.

In the foreclosure lawsuit, Madigan claims that Safeguard routinely breaks into obviously occupied homes, damages the houses they are hired to protect, and forces consumers to prematurely abandon their homes. Madigan goes on to describe Safeguard as a “homeowner’s worst nightmare.”

In response to these allegations, officials from Safeguard claim that they are simply monitoring foreclosed properties to ensure that they are in good condition. But this doesn’t explain why the company barges into obviously occupied homes.

One Illinois resident, for example, had his front door torn from its hinges by a Safeguard employee. The startled homeowner eventually had his doors replaced, but not without an lengthy fight with the foreclosure management firm.

Chapter 13 Bankruptcy May Stop Home Foreclosure

If your home is facing a pending foreclosure action, you may be at risk of similar invasive tactics. But remember that you cannot be forced from your home until your lender obtains a formal court order allowing it do so.

However, it is increasingly difficult for lenders to obtain foreclosure court orders, as a wave of mortgage trading in the last decade weakened many creditors’ claims, as it is now very difficult for many lenders to prove they hold the original documents.

In addition, many homeowners have been able to thwart foreclosure actions by filing for Chapter 13 bankruptcy. For more information on this powerful form of debt relief, contact a Chapter 13 bankruptcy lawyer today.

Former Chairman of Minnesota GOP Files for Chapter 7 Bankruptcy


Tony Sutton, the former chairman of the Minnesota Republican Party, is filing for Chapter 7 bankruptcy protection, according to a report from the Minneapolis Star Tribune.

Sutton, who left his post as the leader of the state’s conservative party in 2011, has contended with rumors of financial foul play during his tenure as chairman for several years, sources say.

Bankruptcy records show that he and his wife, Bridget Sutton, have roughly $2 million in debt, compared with assets worth less than $300,000. The couple’s debt also includes two mortgages worth $327,000, sources report.

Minnesota Political Figure Files for Chapter 7 Relief

Tony Sutton, a hard-charging political figure in Minnesota, rose to the chairmanship of the state’s GOP in 2009. His platform, sources say, featured a prominent focus on regaining credibility with former Republicans who were concerned with fiscal issues.

But his tenure was filled with financial controversy. According to reports, when Sutton left his post in 2011, the Republican Party in Minnesota was several million dollars in debt.

Much of the debt was due to the party’s efforts during the 2010 recount in the governor’s race. The profligate spending in this race reportedly hampered the party’s efforts to elect a governor in 2012, sources say.

Reports say that Sutton’s fall from grace was “one of the most dramatic political downfalls in recent state history,” and the former leader’s strong stances on debt certainly add a bit of irony to his filing.

According to reports, Sutton, while chairman, asked state legislators to oppose all tax increases and reduce spending so that it never outpaced. His motto was reportedly to “live within your means,” sources say. But Sutton quickly steered his party into serious debt.

Politician and Wife Seek Bankruptcy Help

In addition to Sutton’s professional financial troubles, it seems that he and his wife also had debt woes of their own. Sources say the couple owes roughly $70,000 in credit card debt, and thousands of dollars in unpaid state and federal taxes.

To make matters worse, the couple also owes $20,000 in federal student loans, and they reportedly owe hundreds of thousands of dollars to various creditors for personal loans that were used to cover business expenses, sources report.

Of course, political figures file for bankruptcy all the time, just like thousands of Americans across the country. But when political figures who built their careers on financial restraint file for bankruptcy, news outlets pay attention.

Kodak Celebrates Fresh Financial Start After Bankruptcy Ends


This week, Eastman Kodak Co., the iconic film company, exited bankruptcy with a clean financial bill of health, and experts believe the company may be able to regain its lost market share with a new emphasis on digital technology, according to a report from USA Today.

The successful bankruptcy exit was engineered by the company’s CEO, Antonio Perez, who took over the company in 2005 in the face of monumental financial challenges. Today, however, life after bankruptcy looks bright for the film giant.

Kodak Exits Bankruptcy With Eye Towards Future

According to reports, when he took over Kodak in 2005, Perez was tasked with restructuring the firm’s failing film business, creating a brand new company, and reducing the massive legacy costs that burdened Kodak.

During its peak, the company employed thousands of Americans, and while it has dramatically reduced the size of its workforce in recent years, it must still pay pension and healthcare costs for a giant pool of former workers.

And while Perez was able to shift the firm’s focus towards digital film, as well as create a new company, he needed to file for bankruptcy protection to take care of the mounting legacy costs, sources say.

After the firm closed its bankruptcy case this week, Perez admitted that cutting Kodak’s pension costs was going to be “painful for many people, including me,” but he also noted that it was “the right thing to do for the ongoing Kodak.”

“I take full responsibility for all the decisions we’ve made to create a new company. I will not take responsibilities for the legacies bequeathed to the company by someone else,” said Perez.

Kodak Cuts Legacy Costs During Chapter 11 Bankruptcy

So, by filing for bankruptcy help, Kodak managed to cut millions in dollars in unpaid health care costs for former employees. But pushback from former workers caused the bankruptcy to last 20 months, and created plenty of tension.

But closing the bankruptcy case, and removing some of the legacy costs, allowed the company to take several key steps in its journey towards newfound prosperity.

According to sources, the company has already sold its Personalized Imaging and Document Imaging to a company based in the United Kingdom, which allowed it to pay off several creditors.

In addition, the company created a new generation of stock that will be given to unsecured creditors. If the new company succeeds, a new round of employees will have gainful work, and old creditors will recoup some of their lost money.

Fans Should be Beware of Credit Cards Sponsored by Sports Teams


In their never-ending quest to squeeze more dollars out of loyal fans, several professional sports leagues have partnered with major banks to offer credit cards to consumers, according to a report from ABC News.

And while these cards often come with enticing rewards programs, consumers should think twice about using these cards, as they may come with high interest rates, which could lead to large amounts of credit card debt.

Professional Sports Teams Begin Offering Credit Cards

According to reports, several major professional sports leagues, including Major League Baseball (MLB), the National Football League (NFL), and the Professional Golfers Association (PGA), have started offering team-branded credit cards to fans.

And some of these cards come attached with potentially lucrative rewards deals. Barclays, for example, has created the NFL Extra Points card, which gives consumers points when they use their cards that can be exchanged for travel rewards or tickets to future football games.

In addition, the NFL Extra Points card offers a cash back program, discounts on NFL merchandise, and for consumers who accrue 200,000 points, two tickets to the Super Bowl, sources report.

The seemingly exciting deals aren’t limited to the NFL, either. Sources say that Bank of America’s MLB and PGA credit cards offer cash back rewards for consumers who use the card to purchase groceries and gas. They also give consumers the chance to win tickets to events and access to famous golf courses.

To further sweeten the deal, professional sports leagues have allowed credit card companies to use the images of their teams and athletes. But while this may sound fun for fans, the offers may be risky.

Credit Cards Still Contain Some Risks

Credit card debt is the leading reason why consumers file for bankruptcy in the United States, and one of the biggest drivers of credit debt are cards with high interest rates.

And while team sponsored credit cards offer a broad range of potential rewards, cards with extravagant rewards programs often carry relatively high interest rates. If you miss a single payment, interest rates can quickly accrue, and far outweigh any potential rewards you might receive.

Of course, if you’re a responsible credit card user, and confident that you’ll be able to stay on top of your payments, team-sponsored cards may be a good idea.

But if you already have credit card debt, or are concerned about your ability to make your payments on time each month, you may prefer to seek less exciting credit cards that offer lower interest rates.

Number of Home Foreclosures Nationwide Drops by 32 Percent


While several states continue to struggle with unprecedented levels of home foreclosure, the total number of foreclosure filings in June was down 32 percent from the same month last year, according to a report from USA Today.

The positive statistic suggests that the foreclosure crisis may have finally plateaued, but that is little consolation for the hundreds of thousands of Americans who are still looking to stop home foreclosure.

Home Foreclosure Rate Takes Promising Dip

This June, the total number of foreclosure filings, including auctions, bank repossessions, and default notices, dropped by 32 percent from the number last June, according to data compiled by market researcher RealtyTrac.

Sources note, however, that foreclosure filings did jump by 2 percent from the figure this June, but the May numbers had represented the lowest rate in 78 months, which puts the small June spike in better context.

In addition, the number of initial foreclosure starts were up 6 percent this month from May, but were down a remarkable 38 percent from the same month in 2012.

Unfortunately, while foreclosure numbers were down as a whole, 15 states still saw an increase in foreclosure activity. According to Daren Blomquist, a vice president with RealtyTrac, foreclosures have started to “boil over” in states with laws that force the foreclosure process to last for years.

These markets, however, are “becoming fewer and farther between,” and the number of areas with logjams in their foreclosure courts has started to diminish, sources say.

Handful of States See Continued Foreclosure Crisis

This year, a handful of states saw more residents seeking aid from local foreclosure attorneys. Most notable, the foreclosure rate jump 275 percent in Maryland, 137 percent in Oregon, and 89 percent in New Jersey, according to reports.

And while the rate of foreclosure activity has dipped nationwide, the crisis that was triggered by the recent recession had such a strong impact on the housing market that foreclosure rates likely won’t return to normal levels until 2015, sources say.

Still, roughly a dozen states have seen their foreclosure rates dip to normal (which is to say, pre-recession) levels. These fortunate states include Oklahoma, Texas, and Colorado, all of which had steadier home prices than the national average, which helped them avoid massive foreclosure filings.

In contrast, states that suffered more fluctuations in their housing prices, and didn’t experience the same economic growth over the past few years, have continued to struggle with a glut of foreclosed homes.

American Railroad Files for Bankruptcy After Quebec Train Disaster


The American railway company whose train caused an accident in Quebec that killed 47 people last month is under Canadian bankruptcy protection, and it plans to file for bankruptcy in the United States soon, as well.

Sources say Montreal Maine & Atlantic is seeking bankruptcy relief in both countries after the tragic accident created a long list of overwhelming financial obligations for the company, according to a report from Reuters.

Massive Train Accident Forces Company into Bankruptcy

The massive accident, which took place on July 6 and captured international media attention, happened when a train carrying crude oil lost control and derailed in Lac-Megantic, Quebec, a small lakeside village.

When it derailed, the train exploded in dramatic fashion and destroyed most of the village’s downtown area. In addition, nearly 6 million liters of crude oil spilled into the town, according to reports.

The cleanup costs alone are expected to surpass $200 million, but the train company, which is based in the United States, will also probably have to contend with years of expensive litigation.

And the Canadian bankruptcy court didn’t seem to show much sympathy for the company. Judge Martin Castonguay reportedly called the company’s actions “deplorable,” and suggested that it had been poorly managed.

Judge Castonguay, however, said that the decision to allow MMA to file for bankruptcy in Canada would help “prevent legal anarchy.” By allowing the filing, the state has a better chance of consolidating all the claims against the company.

The United States also appears to have granted MMA permission to file for bankruptcy. Sources say a federal judge has already asked a trustee to oversee the company’s proceedings, with the hope that the company will remain open so local companies won’t have an interruption in train services.

Train Company Files for Bankruptcy in Wake of Explosion

The bankruptcy judge in the United States, however, expressed concern that MMA would be able to continue operating without its crude oil transporting business, which was apparently earned the company about $1 million a month.

But the company’s local bankruptcy lawyer dismissed this concern, admitting that the railroad will stop hauling crude oil, but also saying it “had a very healthy business before the hauling of crude oil started about 18 months ago” and that it is “very hopeful that it can bring its revenues back up.”

The company also hopes to sell portions of its business to other train companies in the area, and the bankruptcy attorney expects “there will be a lot of interest from other rail operators in purchasing the lines of Montreal, Maine and Atlantic.”

National Home Foreclosure Rates Dip to Lowest Level in Six Years


Across the country, home foreclosure filings fell this June to the lowest level in six and a half years, according to a report this week from the Associated Press.

The foreclosure rate skyrocketed in 2008 after years of unsustainable rises in home values and an overload of predatory loans combined to burst the housing bubble, but the housing market has finally started to stabilize in many American cities, sources say.

Filings for Foreclosure Dip to Moderately Low Levels

This week, a survey from RealtyTrac showed that a total of 127,790 properties in the United States were subject to foreclosure filings in June 2013, which was down 14 percent from May.

More importantly, though, the figure represented a 35 percent decline from the rate seen in June 2012, and was the lowest rate of foreclosure seen in the country since December 2006, according to reports.

In addition to the decrease in the number of properties currently facing foreclosure, there was also a drop in the number of homes entering the early stages of the home foreclosure process, according to sources.

During the first six months of 2013, banks started foreclosure proceedings against 245,538 homes, which would put them on pace to file foreclosure against 500,000 homes this year. While this may seem substantial, it would pale in comparison to the 671,000 foreclosure actions initiated in 2012.

In another promising sign, repossessions were down in 34 states compared to the same time period last year, although sources caution that they rose in several southern states, including Arkansas and Oklahoma.

The country as a whole is “getting tantalizingly close to being back to normal, healthy foreclosure levels, at least on a nationwide basis,” according to Daren Blomquist, a vice president at RealtyTrac.

Housing Market Steadies as Home Foreclosures Drop

The housing market appears to be steadying across the country, and more and more homeowners are exiting the foreclosure process, as states that were struck the hardest by foreclosure seem to be finally cleaning up the backlog of foreclosure cases.

States with judicial foreclosure proceedings, which often take years of litigation to complete, seem to be purging many of the lagging foreclosure cases from their dockets.

Nevertheless, the average foreclosure process still takes 526 days to complete, according to reports. The biggest culprits were New York and New Jersey, where homeowners can expect to spend 1,033 days in court before their foreclosures are finalized.

Rapper DMX Files for Personal Bankruptcy to Eliminate His Debts


DMX, the veteran rapper who first gained fame as part of the “Ruff Ryder” musical collective, is filing for bankruptcy protection, according to a report from The Wall Street Journal.

Sources say DMX, like many musicians who have filed bankruptcy in the past, has laid the primary blame for his money troubles on the people who manage his money.

DMX Files for Bankruptcy Protection

Sources say DMX, whose birth name is Earl Simmons, filed for bankruptcy with less than $50,000 in assets, despite the fact that he has sold millions of albums over the course of his long career.

But despite his past success, DMX is reportedly crippled by debt, especially the $1.2 million he allegedly owes in unpaid child support, which DMX claims is not his fault.

According to DMX, his financial managers failed to send his child support payments, which is a somewhat dubious argument, but one that DMX will likely continue to raise during his bankruptcy hearing.

And sources say the rapper may have been motivated to call a bankruptcy attorney by a U.S. law that forbids citizens who owe more than $2,500 in child support from getting a passport.

DMX is reportedly eager to visit Europe for a tour of performances, but his inability to obtain a passport has put his travel plans on hold. Of course, since the performances will earn the rapper a boatload of money, the bankruptcy judge may allow him to do his tour while the case is pending.

The bankruptcy filing brings an end to an eventful week for DMX, who reportedly was also arrested in South Carolina by police officers who suspected that he was driving under the influence of alcohol.

This all comes just a few days after he was arrested in South Carolina on suspicions of driving under the influence.

Another Musician Heads to Bankruptcy Court

According to reports, DMX has been struggling for years to meet his debt obligations. A year ago, for example, he was ordered to pay nearly $300,000 to a dog clothing line after he failed to promote the company. He has yet to pay this debt, sources say.

But, like many musicians in the past, DMX believes his money managers are at fault. In a recent statement, the rapper blamed his troubles on “poor financial management by prior representation.”

DMX also said the purpose of the bankruptcy was to allow him to “perform for his fans overseas,” including fans in both Europe and Africa.

Study Reveals American Consumer Debt is Rising at a Rapid Rate


American consumers are starting to take on new debt at a surprisingly fast pace, according to a report this week from the Washington Post.

Sources say consumer debt jumped by $19.6 billion in May, which represents an 8.3 percent increase over the same month last year, and suggests that consumers are starting to open their wallets again.

But while the increase in spending represents good news for the economy as a whole, it may lead to financial pain for consumers who add too much debt in the next few months.

Bankruptcies Could Rise as Consumer Debt Increases

While the increase in consumer debt could lead to a rise in the number of people filing for bankruptcy, it might spell some positive news for an economy that has continued to limp along since the end of the recession.

According to the Washington Post, consumer credit jumped across the board in nearly every major category, including car loans, student loans, and credit card debt. This means that consumers are spending more than they were a year ago.

And if shoppers continue to add new debt at an 8.3 percent clip for the next 12 months, Americans would see a $235 billion addition in consumer credit, which amounts to more than $2,000 per household, according to reports.

Economists say the new figures provide convincing evidence that Americans have finished paying down their debts, a process known as de-leveraging, and are now more concerned with making new purchases.

And the newfound willingness to shop certainly seems like good news for the economy as a whole, but it may prove costly for people taking on too much debt. These consumers may be calling a bankruptcy attorney months from now.

Rise in Consumer Debt Could Have Consequences

According to sources, many economists are nervous about the pace with which Americans are adding new debt. The overall level of consumer debt, a staggering $2.84 trillion, is a record, even when adjusted for inflation.

In addition, the amount of outstanding debt is already up to the level it reached in 2006, just one year before the global economy almost collapsed.

But the U.S. economy is driven by consumer spending, and the rise in consumer debt means that shoppers are finally starting to pour more cash into the empty coffers of American retailers.

So the spending boom is necessary, but consumers must be careful not to become too leveraged. Everyone would be wise to remember the lessons of the latest recession.

New Law to Drop Health Insurance Costs in New York by 50 Percent


The Affordable Care Act has received plenty of criticism from both sides of the political aisle, but it will likely allow New Yorkers to drop their health insurance costs by 50 percent next year, according to a report from The New York Times.

Sources say the federal health care law has led a significant decrease in insurance costs in the Empire State, which could reduce the high levels of medical debt in New York.

Affordable Care Act Starting Impact Health Insurance Costs

Gov. Andrew Cuomo announced this week that state regulators have started approving health insurance premiums for 2014 that are up to 50 percent lower than rates available in New York today.

This October, for example, New York City residents who currently pay $1,000 a month for health insurance will be able to find comparable coverage for as little as $308 a month.

And with the addition of federal subsidies to the mix, these health insurance costs could dip even lower, according to sources following the insurance trends.

According to supporters of the new law, the drop in rates is due to the online purchasing exchanges created by the Affordable Care Act. In theory, these exchanges are supposed to create competition between insurance companies, forcing them to lower rates

The new law requires that similar exchanges be implemented in every state, and officials from the Obama Administration believe that other states will have similar success.

“We’re seeing in New York what we’ve seen in other states like California and Oregon — that competition and transparency in the marketplaces are leading to affordable and new choices for families,” said Joanne Peters, an official with the Department of Health and Human Services.

Effect of Health Care Law on Medical Debt Remains Unclear

But while the new health care law seems to be having a positive impact, the new insurance rates only apply to New Yorkers who purchase health care on their own. Those with employer-based coverage may not necessarily see the same benefits, according to reports.

Sources note, however, that roughly 2.6 million people in New York do not currently have health insurance, so a large number of residents may be able to take advantage of the lower rates.

In fact, state authorities believe that more than 600,000 residents of New York will decide to buy their own health insurance during the first few years of the program, although this is simply speculation.

Famous Masonic Temple in Downtown Detroit Files for Bankruptcy


The Detroit Masonic Temple, which has operated as an iconic theater for several decades is filing for bankruptcy protection, in a move that may foreshadow Detroit’s decision to pursue the same form of debt relief.

Or at least it seems like the theater is filing for bankruptcy. According to a report from the Detroit Free Press, the manager of the Masonic Temple claims that the theater is in fine financial shape.

Manager Disputes Report of Bankruptcy Filing

According to Steve Genther, the manager of the Masonic Temple, the theater itself is not seeking bankruptcy help. Rather, the entity that filed for bankruptcy is the theater’s former management company, sources say.

But sources say it’s beyond dispute that the famous theater, which has served as a venue for musicians as famous as the Rolling Stones, has struggled with a wide range of financial problems for several years.

Sources also say the theater narrowly avoided having its electricity service stopped last year, and was headed towards foreclosure before musician Jack White saved the venue by paying its $142,000 tax bill.

Again, though, Genther stresses that the bankruptcy filing isn’t tied to the theater, but instead to the company that used to own the property. In addition, Brad Dizik, the Masonic Temple’s spokesman, also told sources that the theater is in no danger of filing bankruptcy.

Nevertheless, the Theatre Co., the company that owns the Masonic Temple, is facing an enormous lawsuit from an event company. This lawsuit, however, has been stayed pending the completion of the bankruptcy.

Sources also say that the Theatre Co. may have up to $500,000 in debt, but its assets are only worth a maximum of $50,000. The company reportedly owes money to several creditors, the largest of which are the State of Michigan Unemployment Insurance Agency and All American Waste Services of Romulus.

Theater Troubles Match Financial Ills Faced by Detroit

While Detroit’s most historic music venue faces potential foreclosure, the city itself continues to limp towards a potential bankruptcy filing of its own, sources say.

Detroit has flirted with bankruptcy for months, and is currently in the hands of an emergency receiver who has temporarily taken control of the city’s finances away from the mayor and city council.

Thus far, the city has managed to remain afloat, but as revenues continue to sink and pensions costs continue to rise, Detroit may soon find itself on the precipice of a historically large municipal bankruptcy, sources predict.