In a February 20, 2008 press release, The Sharper Image has announced that it has filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. The Sharper Image is home to some of the most unique high-end electronic gadgets with a strong customer base throughout the world. According to the press release, “the Company intends to continue to conduct business as usual while it devotes renewed efforts to resolve its operational and liquidity problems and develops a reorganization plan.”
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Archive for the ‘Bankruptcy’ Category
The Sharper Image and DiamondJacks Casino File for Bankruptcy
Friday, March 14th, 2008US Bankruptcy Code
Monday, March 5th, 2007The United States Bankruptcy Code from 1978 was rewritten and is now known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Public Law No. 109-8, 119 Stat. 23, April 2005). This reform act took nine years from the start of discussion to actual enactment and went into effect on October 17, 2005. This act is the most recent revision of the Title 11 Bankruptcy Code (11 USC § 101 et seq). This new law has made major changes to both chapter 7 and chapter 13 bankruptcies. Chapter 7 of the bankruptcy code is liquidation and chapter 13 of the bankruptcy code is a reorganization of your debts.
You can receive a full copy of the text via the Government Printing Office; click here for the Reform Act. The House Judiciary Committee also has a redline version of the act online. The redline version shows the line-by-line contextual changes in the act. The American Bankruptcy Institute has made that document available here – Public Law 109-8.
Filing for Bankruptcy
Monday, March 5th, 2007If you are reading this site then you are probably in a financial bind and are considering bankruptcy as one of your options for debt relief. Filing for bankruptcy is a federal court procedure. The first step in filing for bankruptcy is to find a knowledgeable bankruptcy attorney. The attorney will sit down with you and go over all of your assets as well as all of your debt to determine which chapter of bankruptcy would be appropriate for you to file; Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Upon determining which chapter you will file the paperwork begins. Your credit reports will be pulled in order to make sure that there are no debts that you’ve missed. The protections offered under the two bankruptcy codes will begin once the bankruptcy petition is filed in a federal court.
Now that you know a bit about getting started you may be asking yourself, is this the right step for me? There are alternatives to filing for bankruptcy but for the most serious of cases bankruptcy is the right step. The bankruptcy laws were changed in 2005 and are written in such a way to help the person gain the most benefit out of filing for bankruptcy. Not only does it give them a fresh start with regards to debt but with the counseling classes it gives the individual more knowledge to make the best of the fresh start.
Bankruptcy Lawyers
Monday, March 5th, 2007A very important part of filing your petition for bankruptcy is finding the right bankruptcy lawyer. Just as an employer would interview possible job applicants it is important that you interview possible bankruptcy lawyers. You will want to find a lawyer that either specializes in bankruptcy or devotes a large portion of their practice to bankruptcy cases. Ask them how many bankruptcy cases they have overseen and whether all of the outcomes were positive as things can and do go wrong in bankruptcy proceedings.
You will also want to ensure that you are comfortable with your lawyer on a professional level. The two of you will be spending time together going over sensitive data and a good professional working relationship is key. Make sure you feel comfortable asking questions of the lawyer and that they answer the question to your liking. If you aren’t sure what is being discussed or is to happen then ask, that is what they are there for. Don’t feel the pressure to retain the first lawyer that you interview, if you don’t feel that this is the lawyer for you then thank them for their time and continue on to the next lawyer on your list.
Another important aspect of a bankruptcy lawyer is finding one that is certified for bankruptcy in your state. Your state’s Bar Association should have that information and may even have a lawyer referral service to help you start your list of lawyers to interview.
Once you have found the lawyer you like please be sure to get a statement of fees as you’ll want to know how much the preparation, filing, representation, etc is going to cost. You’ll want to know whether such additional matters as disputes with the trustee and other non-traditional transactions will be covered.
Bankruptcy Laws
Monday, March 5th, 2007Bankruptcies are filed in a federal court and are under federal jurisdiction even though some laws can vary by state. The bankruptcy laws were rewritten in 2005 so it is imperative that you have the most up-to-date information available. One of the biggest changes in the bankruptcy laws is the requirement for credit counseling. The credit counseling must be approved by an agency approved by the Department of Justice. The main purpose of the counseling is to help you determine if you actually need to file for bankruptcy or if one of the many bankruptcy alternatives would be a better choice for you. In addition to the pre-filing counseling session you will also be required to attend another counseling session upon discharge. The second counseling session helps you learn the finer points of personal financial management including budgeting.
The eligibility rules have also changed to determine who may qualify to file for bankruptcy. The first is to determine if you meet the income requirements to file a chapter 7 bankruptcy. You will determine your average income over the previous six months and compare it with the median income for a family of your size in your state. If your income is less than or equal to the median income then you qualify to file for a chapter 7 bankruptcy. If your income is higher than the median then you must pass the means test.
Bankruptcy Forms
Monday, March 5th, 2007As with any legal proceeding, there are several different forms that will need to be filled out and submitted when filing your bankruptcy petition. Filling out the forms may prove difficult and that is where having a bankruptcy attorney comes in handy. The list is long and there are different forms required to file a petition as well as different procedural forms that may be used throughout the proceedings. You can view all of the forms on the US Courts website.
Bankruptcy Exemptions
Monday, March 5th, 2007When you file bankruptcy you will make a list of all of your assets, including any personal property you have. The personal property will fall into one of two categories – exempt and non-exempt. Exemptions vary by state but in general the following types of items are exempt. Motor vehicles to a certain value (to be determined on a case-by-case basis), reasonable and necessary clothing (fur coats are not usually considered reasonable and necessary), household appliances, reasonable and necessary household furnishings and goods, and jewelry to a certain value (again to be determined on a case-by-case basis).
In addition to the above-listed items, pensions, life insurance policies, part of the equity in your home, tools of your profession, and public benefits (social security, unemployment, etc) may also be exempt. The following items are generally considered non-exempt and will need to be relinquished during the bankruptcy proceedings: stamp, coins, and other collections; family heirlooms; cash, stocks, bonds, and other investments; a second vehicle; a second or vacation home.
The important thing to remember with exemptions is that they will vary not only by state but on a case-by-case basis within the same state. This is when having a very knowledgeable and experienced bankruptcy attorney comes into play. The better your attorney is the better they will be able to apply the bankruptcy laws to your specific case.
Bankruptcy Checklist
Monday, March 5th, 2007In order to begin your bankruptcy petition you will need to have many types of information readily available and organized in one place. The following checklist will give you a good start as to what you will need when you sit down to fill out the paperwork either by yourself or with the help of a paralegal or bankruptcy attorney.
- Copies of your federal and state tax returns for the past two years
- Copies of your last two paycheck stubs
- Your Social Security number
- List of all the bills you owe, a recent statement from each creditor would be best
- History of residential addresses for the past six years
- Copies of the deed or mortgage papers for any real estate you own
- Appraisals of any property you have including non real-estate items like jewelry, furst, etc
- List of all your bank accounts including a recent statement from each
- Safe deposit box information if you have one
- All insurance policies including homeowners and life
- Information regarding all of your investments including stocks and bonds
- Copies of any leases or other promissory notes from the past three years
Chapter 13 Bankruptcy
Monday, March 5th, 2007Filing a bankruptcy under chapter 13 of the bankruptcy code allows for individuals to undergo a financial reorganization which is supervised by a federal bankruptcy court. The purpose of a chapter 13 bankruptcy versus a chapter 7 bankruptcy is it allows an income-receiving debtor to keep some assets that would be liquidated under a chapter 7 bankruptcy. Individuals who are earning a regular income and have less than $250,000 in unsecured debt and less than $750,000 in secured debt may be eligible to file for chapter 13 bankruptcy.
A chapter 13 bankruptcy usually includes a repayment period of 36 months. The court will determine the amount of your payments and you will make that amount to the trustee every month for that entire period. It is imperative to understand that if you miss even one payment your bankruptcy will be dismissed and you will no longer be protected under the laws of a chapter 13 bankruptcy. At the end of the 36 month period your unsecured debts will be discharged, regardless of the remaining balance. A benefit of a chapter 13 bankruptcy over a chapter 7 bankruptcy is it is typically removed from your credit report more quickly; seven years after you’re initially file versus ten years for a chapter 7 bankruptcy.
Chapter 7 Bankruptcy
Monday, March 5th, 2007Let’s start off with discussing what a Chapter 7 bankruptcy is. A chapter 7 bankruptcy is basically a liquidation proceeding. The debtor will turn over all of their non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the various creditors listed in the bankruptcy paperwork. Bankruptcy laws do vary by state so please be sure to check with a licensed bankruptcy attorney in the state in which you will file.
In order to file for a chapter 7 bankruptcy you must reside, have a place of business, or property in the United States plus you must not have been granted a Chapter 7 discharge within the past six years or have completed a chapter 13 repayment plan. Additionally you must not have had a bankruptcy filing dismissed for cause within the past six months and you must pass a means test.
So now that you understand what a chapter 7 bankruptcy is and what qualifications you must have to file, let’s look a bit more about why people would need to file for chapter 7 bankruptcy. There are many reasons, and they vary by person, but the most common reasons are unemployment, very large medical expenses, marital problems, and any other type of unexpected but large expense.
The bankruptcy laws changed in 2005 and now all petitioners are required to attend debt counseling courses within six months prior to filing for protection under the chapter 7 bankruptcy laws. To find a listing of government-approved credit counseling organizations please visit the US Trustee Program at the US Department of Justice. In addition prior to completion of the chapter 7 bankruptcy proceedings, you will also be required to complete a financial education course. The list of approved providers of personal financial management instructional courses can be found on the US Trustee website as well.
Once you file your petition for protection under the chapter 7 bankruptcy laws many creditor actions must cease and desist. This includes collection calls, foreclosure procedures, and other efforts to collect a debt. At this point having a very knowledgeable lawyer comes into play as it is time to determine what happens to your assets. There are some exemptions; we’ll cover those in our Bankruptcy Exemptions topic.