LegalHelpers.com Bankruptcy Blog
Perspectives From The Nation's Largest Consumer Law Firm


How to Know if You Qualify for a Chapter 7 Bankruptcy

Monday, 10 May 2010 08:40

For the most part, it is not too difficult to qualify for chapter 7 bankruptcy protection. Once you qualify for one, you can eliminate your current debt and have a fresh beginning at your financial life.

It’s important to note that chapter 7 is NOT a repayment plan like chapter 13, and that not everyone is eligible for bankruptcy protection. There are a few qualifications one must meet to be eligible. These can include but are not limited to:

·         You can’t have filed a chapter 7 in the last 8 years

·         You can’t have filed a chapter 13 that paid back less than 70% of your loans to unsecured creditors in the previous 6 years

·         You must demonstrate that your income is not sufficient to repay even a small portion of your creditors.  Congress, in 2005, passed the Bankruptcy Abuse Prevention and Consumer Protection Act which created the “means test.”  The “means test” creates an “objective” test to help the Courts determine whether or not a particular person has the means to repay creditors. 

If you don’t fit into these qualifications, it’s likely that your chapter 7 bankruptcy will be dismissed.  In some cases, if you are ineligible for chapter 7 relief, you could still qualify for chapter 13.   Each case is different and only a skilled and experienced bankruptcy attorney can help you take the right action to get you out of debt now. Speak with a Legal Helpers attorney today by calling 800-260-1402 for a free evaluation.  

2 Years After Bankruptcy, Sharper Image Goes After Ex-CEO’s Severance

Friday, 07 May 2010 08:44

Sharper Image, Ltd. just got the go-ahead to retrieve a 6 million dollar severance bonus from former CEO Richard Thalheimer in order to pay off its debts. 

The company closed the doors of its retail locations for good in August of 2008.  Still, post-bankruptcy Sharper Image hasn’t completely fallen off the map, as they maintain their company’s website and sell products (ranging from TV remotes to back massagers) through Best Buy and Bed, Bath and Beyond.  The court found through the Bankruptcy Code that payments made within two years of a company’s demise could be pursued to pay off creditors.

The legal action must sting for Thalheimer, as he founded Sharper Image in the late 70s.  He also discovered and was also instrumental in selling Sharper Image’s most profitable product, the Ionic Breeze Air Purifier.  3.2 million Americans bought the air purifier, and it was considered an unparalleled success for the luxury electronics seller.  It differed from other purifiers, as it wasn’t fan-based and was completely noiseless.  But due to its electronic components, this meant that it emitted unhealthy levels of ozone. 

When Consumer Reports caught wind of this information, they broadcast it near and far, and Sharper Image countered them with an ill-advised libel suit that the ionizers were unfairly tested—their claim was unfounded, and accumulated $525,000 in legal fees for the troubled company.  That sum was particularly nasty when doubled with the $600 million settlement, which offered a $20 merchandise refund to each of the 3.2 million customers who had bought the toxic air purifiers.

So while the bankruptcy court has ruled to secure $6 million from the former founder, they will first have to trudge through the appeal to secure those funds.  The $6 million sum also happens to be the total price of Sharper Image’s bankruptcy proceedings, and paying it off would finally free the company of its liabilities.

 For Sharper Image, a series of bad investment decisions led to massive debt and legal fees. However, even regular consumers like you can make all the right financial choices but still fall into the credit card trap, or have extenuating circumstances like health issues that push them into debt. 

You can overcome bad financial luck with a bankruptcy that will protect you from your creditors.  Call Legal Helpers for a free initial consultation to find out more at 1-800-260-1402.

A Boom for Blockbuster—Movie Gallery, Inc. Files for Bankruptcy

Thursday, 06 May 2010 13:27

After closing 570 locations in 2007, filing for Chapter 11 bankruptcy in 2008, and closing an additional 450 locations in 2009, Movie Gallery, Inc. is finally shutting its doors for good.  The movie rental chain initially filed their bankruptcy in February of this year, and can now expect to close more than have of its 2,415 locations, starting with their Hollywood Video locations.

This is good news for Blockbuster, Inc.’s ears, as they now can claim a relative monopoly on the video rental chain market.  Investors turned heads at the news too—Blockbuster’s stock jumped 18 percent to trade at 44 cents a share. 

However, now that movie rental has taken on the instant-access of the Internet, there are dozens of alternatives to renting at a store—Netflix, iTunes, Hulu, Comcast on Demand, and many more.  Industry giants like Blockbuster have tried to keep up with this “instant” demand and have had to close 900 stores in the U.S., and “opening” 10,000 automated kiosks in 2010.  Still, they show no signs of returning to their grand old glory days—despite changing its tactics, Blockbuster has been dealing with severe financial losses for months.

If Blockbuster does end up filing for bankruptcy, they will probably liquidate their stores first, instead of the efficient automated kiosk rental stations. 

If you’re accumulating late fees more serious than an overdue DVD, you might want to consider bankruptcy as a solution.  You can consolidate the debt you have without tripling it in a creditor lawsuit.  Call Legal Helpers for relief and protection toll-free at 1-800-260-1402.  There’s no charge for the first consultation. Call now.

Proposed Legislation Allows Discharge of Private Student Loans in Bankruptcy

Thursday, 06 May 2010 12:26

http://www.nextstudent.com/student-loan-blog/blogs/sample_weblog/archive/2010/05/04/Proposed-Legislation-Allows-Discharge-of-Private-Student-Loans-in-Bankruptcy.aspx

 

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ABOUT THIS BLOG:

Richard K. Gustafson, II is an attorney with LegalHelpers.com writing on topics related to bankruptcy from the consumer's perspective. To send comments to Rick, email Blog@LegalHelpers.com.


The Bankruptcy Blog from LegalHelpers.com is produced from the law firm of Macey & Aleman, one of the nation's largest bankruptcy firms. A blog does not create an attorney-client relationship and is not a substitute for specific legal advice from an attorney analyzing your specific set of facts. If you are interested in obtaining information about bankruptcy, you are encouraged to call our law firm at 888-743-5787 or complete our online evaluation for a confidential, risk-free analysis!

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