We are providing a great deal of bankruptcy information for those considering, or just researching, bankruptcy.  This growing collection of information includes the complete bankruptcy code, and future sections will cover debt and all consumer options surrounding bankruptcy.

Federal Bankruptcy law benefits both debtors and creditors by seeing that debtors get debt relief and creditors collect some of the debts owed. The types of bankruptcy filings are referred to by the chapter of the federal Bankruptcy Code that describes them.

Generally, individuals use Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Each case is different, but someone with few or no valuable assets would prefer chapter 7 because it involves a liquidation of most or all assets. Chapter 13 bankruptcy is a reorganization of debts where the debtor and creditors must accept new terms for debt repayment.

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Mortgage borrowers are offered help in several ways.  They may have their rates lowered, balances reduced, be given grace periods or longer repayment schedules.  But, surprisingly a number of homeowners who do get their payments reduced fall behind within a year.

This is one of the biggest challenges in the foreclosure crisis.  With a weak economy employers may continue to cut jobs or salaries, thus increasing the challenge of a mortgage that has been modified. 

More on this story – MSNBC.com

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The government has expanded a program to help the unemployed buy health insurance.  But, millions of people are not able to access the aid because of the programs design.

As a part of the economic stimulus plan, $25 billion was allocated to pay 65% of health-insurance premiums for workers laid off in 2009.  Congress has extended the program for people laid off through February 2010.  Because it is tied to the narrow parameters of Cobra, the Consolidated Omnibus Budget Reconciliation Act of 1985, the program is not available to many people in need.

Cobra requires companies that qualify offer group health insurance for former employees for up to 18 months. Insurance costs under Cobra have increased so that many people can’t afford the unsubsidized 35% portion. Meanwhile, millions of people don’t qualify for Cobra.  Those include the self-employed, those working for companies that shut down or are too small, or companies who didn’t offer health insurance at all.

The subsidy is only available to those laid off since October 2008.  Those affected prior to this date are not eligible.

This program is helping despite the gaps says the current administration. “This is a vast improvement over what was in place before when there were no subsidies at all,” says Jason Furman, deputy assistant to President Obama for economic policy. This program is only a short-term response to the current economic crisis and not a permanent answer.

More on this article in the Wall Street Journal.

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Families are struggling to cover the cost of a higher education with job layoffs, shrinking college funds, and fewer private loans available.  There may be more help availble.

Many families are requesting reviews of their financial-aid packages to make sure they truely reflect their current financial situation.  This allows families to have their expected contributions recalculated.  Typically awards are based on prior year household income and this allows the family to have their current income reviewed.

This allows the school to re-evaluate students’ financial-aid packages, which could qualifying them for more aid including federal grants, loans, and need-based scholarships.  This has been encouraged by the Department of Education for people who need them.  A good candidate for adjustment would be families with a recent layoff or salary cut. 

There are also families with hardship withdrawals from retirement accounts for things like medical bills, this might qualify for re-evaluation as the withdrawal would normally count as income on a tax return.  Each school will have different requirements.  Requests for reviews are best done in writing.  All requests require documentation of the circumstance, such as a pink slip or copies of medical bills.

In addition, independent students not claimed as dependents on a parent’s tax return will also have an improved chance of getting an adjustment.  If they experience layoff from a job or reduction in income they may also apply for re-evaluation.  More information in the Wall Street Journal.

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Thursday morning The Senate passed a $871 billion health care reform bill.  This gives President Barack Obama a Christmas victory on his top domestic priority.  After months of heated debate all members of the Senate ended up voting their party line. 

This bill would constitute the largest expansion of federal health care since Medicare and Medicaid over four decades ago.  It would extend insurance coverage to over 30 million additional Americans.  “We are now finally poised to deliver on the promise of real, meaningful health-insurance reform that will bring additional security and stability to the American people,” Obama said shortly after the vote.

This Senate bill will be merged with a plan approved by the House of Representatives in 2009.  Democrats plan to have a bill to President Obama for signature before the first State of the Union address in 2010.  

More on this Bill at CNN Money.

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CNNMoney.com reported that Citadel Broadcasting Co., the third-largest radio group in the United States, filed for Chapter 11 bankruptcy Sunday.

Citadel has broadcasting stations in 25 states.  It has been know for some time that the company has a great deal of debt and may be headed for bankruptcy.  They have filed in the Southern District of New York.

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The same economic pressures that pushed California to the brink is causing stress in other states as well.
The 10 most troubled states are: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.
The list is based on several factors, including the loss of state revenue, size of budget gaps, unemployment and foreclosure rates, poor money management practices, and state laws governing the passage of budgets.
Read more at CNN Money.

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Charter Communications Inc. said Monday that its loss widened in the third quarter but that it expects to emerge from bankruptcy soon. The nation’s fourth-largest cable provider lost $1 billion in the three months ended Sept. 30.
Charter continues to recieve financial pressure from the recent economic downturn along with increased competition. Charter determined that its projected future growth would be lower than previously anticipated.
More on this story at St. Louis Business Journal.

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The Wall Street Journal shows unemployment figures aren’t as bad as they look. They’re worse. It isn’t just that the headline jobless rate topped 10%. Behind these figures you’ll find that 16.3% of the workforce, or one person in six, is either unemployed completely or working part-time. And the numbers of long-term unemployed are staggering: more than a third of unemployed Americans, 5.6 million people, have been out of a job for more than 27 weeks, according to the federal government. And the employment picture isn’t expected to improve significantly until mid-2010.
If you are worried that your job is in peril, you are not completely powerless. You can protect what you’ve earned. This may be especially important for older workers, many of whom are having a tough journey back into the workforce.
The first step toward shielding yourself is to protect your home. Many states, including Florida and Texas, offer homestead protection, which will shelter some or all of the value of your home from creditors (other than the mortgage company). Getting homestead protection may be as simple as filing a form at your local registry of deeds.
Next, take steps to protect your savings. Most people know that money held in an individual retirement account (IRA) or a retirement plan such as a 401(k) or a qualified pension plan is protected from taxes until withdrawals are made. That money is also protected from creditors—so if you’re able to make additional contributions to these accounts, this may be a good time to do so.

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Sean Engelking was pretty confident of his future when he arrived in New York in 2008 to pursue a career in banking. He had just taken an internship after graduating with a degree in economics.

Engelking’s internship ended abruptly soon after moving to the New York. He then got a job working for software firm BizTech, but was laid off several months later. Still out of work and collecting unemployment, he can no longer afford the payments on his student loans. Recently, he paid a visit to a bankruptcy lawyer to weigh his options.

Unemployment in the city hit 10.3% in August and with the economy still murky, bankruptcy has become a reality for many New Yorkers who never considered it before. “Bankruptcy used to be for people on the fringe,” said Manhattan consumer bankruptcy lawyer David Shaev, who advised Engelking.
“Now it’s for people who had good jobs who have lost them,” Shaev said. “We have more middle-class people who are saying, ‘I can’t believe I am in this situation.’ ”

Read more at NYDailyNews.com.

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