Debt Negotiation - Why Debt Negotiation Beats Filing Bankruptcy
Author: Blair Alfred
In order for you to understand why debt negotiation beats bankruptcy in 2010 you will have to know a bit about both of them. This article will focus on the similarities and particularities about both of these two options used to clear debt.
The first option is called debt negotiation due the fact that is simply based on talking. You hire a debt settlement company to do the talking for you and you just have to give your approval if the amount reduced is of your liking. You can relax during the process because the debt settlement company will take care of every aspect, all you have to do is make sure you can reach the remaining amount in two or three years. You don't even have to worry about interest in these 3 years, or about penalties; you don't even have to worry about government taxes because it is supported by the government and it grants debt settlement tax relief. After the process is complete and you are free of debt, your credit score will increase so that you can take another loan if you need the money.
A short presentation about bankruptcy will show why debt negotiation is better.
It is true that usually bankruptcy takes a year to complete, which is shorter than debt negotiation, but there have been cases in which bankruptcy was declared after eight years of court hearings. And it is not all about the time you spend clearing your debt, it is also about how you do it. With bankruptcy you will be stressed and you will have to run around town to get all the needed paperwork and then go and present them in court, not to mention that you can't go to court without legal representation, so you will have to hire a bankruptcy lawyer which can set you back financially quite a bit. After you declare yourself bankrupt, your credit score will be crashed and no creditor will grant you a loan due to the high risk you represent for the company.
You can see that debt negotiation has every aspect in order and can help you clear debt in a relaxed and ethical way.
Debt settlement is a legitimate alternative to filing bankruptcy and often makes sense for consumers on the verge of bankruptcy. There are also other debt relief options available so it would be wise to speak with a debt relief specialist to go over your different options.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/debt-negotiation-why-debt-negotiation-beats-filing-bankruptcy-2720485.html
About the Author
www.debteliminationagency.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.
http://www.debteliminationagency.com
Contact us for free debt advice = 8883613619
What happens at a Chapter 13 Bankruptcy hearing? We’re in GA?
My wife and I are filing chapter 13 bankruptcy. Our lawyer told us today that we would have to go to 2 hearings in court once we sign the papers for the bankruptcy. What exactly happens at these hearings? Are we going to get bombarded with questions by lawyers from the creditors? Is it a fairly smooth process I mean once we sign the papers the trustee has approved the repayment plan right?
How long do Bankruptcy hearings typically last at the creditors meeting?
Chapter 11 Bankruptcy?
What is the procedure which a debtor-in-possession under Chapter 11 must follow to obtain confirmation of a plan. Please include a list of the various essential documents, the court hearings involved and what the creditor should receive to vote on the plan.
Why do we let Greedy Capitalists own our Livelihoods?
Tribune Company files for bankruptcy
By Kristina Betinis and Alexander Fangmann
15 December 2008
World Socialist Web Site
On Monday, December 8, the Tribune Company, which employs about 16,000 workers, became the first major news company to file for Chapter 11 bankruptcy protection in the current economic downturn. The filing, which threatens the jobs, wages and pensions of thousands of workers, allows the company to stop paying interest on its $12.9 billion in debt and enter into debt restructuring negotiations with its creditors. The bankruptcy filing lists the company’s assets at $7.6 billion
The Tribune Company is a media empire comprising the Chicago Tribune, the Los Angeles Times, the Baltimore Sun, the Fort Lauderdale Sun-Sentinel, the Orlando Sentinel, at least 6 other daily newspapers, a cable network, a radio station, 24 television stations, several weekly papers, Chicago Magazine, and numerous websites. It also owns the Chicago Cubs and their stadium, Wrigley Field, which are not listed as part of the bankruptcy filing.
At court hearings last Wednesday, the media conglomerate asked a bankruptcy judge for permission to cut employee severance payments and health care benefits. In 1986, the Chicago Tribune smashed a bitter strike by pressmen and other craft unions, replacing 1,000 workers with strikebreakers. Today, the entire conglomerate is mostly non-union.
Many media companies are suffering from dwindling advertising revenue, as well as the loss of readers to the Internet. In another recent sign of the downsizing and consolidation of the industry, the Detroit Free Press, owned by Gannett Co, and its partner, the Detroit News, are planning to end home delivery on all but the most lucrative days, which are Thursday, Friday and Sunday.
The most direct cause of the Tribune Company’s bankruptcy, however, is the company’s staggering level of debt. Several large media companies, including Media General and Gannett, face enormous debt payments and may soon find themselves in a similar situation.
Last year’s privatization of the Tribune Company bears the marks of leveraged debt financing characteristic of the recent climate of rampant speculation.
In December 2007, billionaire real estate mogul Samuel Zell, nicknamed the “Grave Dancer” for his history of buying distressed or undervalued businesses, completed the transaction to take the Tribune Company private. He was estimated by Forbes in 2008 to be the 68th richest American. Zell, the Tribune Company’s chairman and CEO, pursued a heavily leveraged buyout of the company which was widely characterized as extremely risky and indicative of the irresponsible investments leading up to the recent crisis. The Wall Street Journal reports that “no one thought the buyout of Tribune Co. would work—and it didn’t.”
Ruthlessness typifies Zell’s approach. Speaking on the mortgage crisis at the Milken Institute Global Conference in April, Zell was quoted as saying, “This country needs a cleansing. We need to clean out all those people who never should have bought in the first place, and not give them sympathy.”
Zell maintained he could make the Tribune Company deal profitable through a combination of asset sales and reorganization to take place under the new management team, which had little or no experience in the newspaper industry. Senior executives knew that bankruptcy would likely be filed soon, in an effort to protect investments.
While Zell invested $315m of personal equity, with substantial risk mitigated by tax breaks, debt was piled on to the company in the acquisition process. By the time of its completion, Zell’s deal had saddled the Tribune Company with $11.2 billion in debt.
Most of the risk for the Tribune Company’s enormous debt was pushed onto the newly-created Employee Stock Ownership Program, which purchased $250 million worth of newly issued stocks upon being established in 2007. These schemes, promoted by the union bureaucracy to “save” failing companies, while securing the interests of big investors, have produced nothing but disaster for workers. This was the case at United Air Lines, McLouth Steel and other companies where workers lost their pensions, wages and life savings when the so-called worker-owned companies collapsed.
The Tribune ESOP, as the majority shareholder, assumed most of the risk for the debts. Those employee shareholders are also at the end of the line of creditors in the bankruptcy proceedings. Speaking to the Chicago Tribune, Zell admitted it was likely that the employee stock owners could have their holdings wiped out. The Chicago Tribune reported that Tribune Company “will halt all severance payments, deferred compensation and other payments to former employees, who will be required to file a claim with the bankruptcy court.”
The executive director of the National Center for Employee Ownership published an analysis of the Tribune Company’s ESOP in 2007 which included the following:
The executive director of the National Center for Employee Ownership published an analysis of the Tribune Company’s ESOP in 2007 which included the following: “In the Tribune case, the ESOP will borrow money from the company. Regardless of how the plan acquires stock, company contributions to the trust are tax-deductible, within certain limits. So in this case, the company is able to use the ESOP to borrow money and repay it in pretax dollars, deducting both principal and interest. This is one of the key tax benefits that the many articles on this transaction are referencing.”
In this case, as in other cases, an ESOP was established as part of the privatization to provide tax advantages and risk protection to Zell and company, rather than provide security for employees through ownership stakes, which clearly confirms the predatory nature of the Zell acquisition.
n the first eight months after the Zell acquisition of the Tribune Company, more than 900 Chicago Tribune jobs were eliminated. Compounding the instability posed by the risky acquisition, the Tribune Company continued to see its advertising revenue fall sharply. In an effort to cut costs, the Chicago Tribune introduced a smaller, reformatted paper in September of this year, composed of fifty percent advertisements and fifty percent graphics-intensive reporting. The cost cuts were achieved by reducing news content and the staff required to produce it, which could be printed on fewer pages. By August 2008, increased layoffs, employee buyouts, and other cost-cutting measures failed to reverse the company’s decline.
http://www.wsws.org/articles/2008/dec2008/trib-d15.shtml
Jim,
Workers everywhere are taking it on the chin through no fault of their own. The capitalist is nothing but a leech on the working class. Capitalism is class warfare. The capitalist gets richer and richer as labor works harder and harder for less and less, as his benefits are slashed and his job “offshored” to cheap labor locations.
If you had read this article, Zell’s recklessness lies at the foundation of ruin for the employees of Tribune Co.
“The ongoing debate over the auto bailout has demonstrated the conspiracy of the automakers, the two big business parties and the UAW against the autoworkers. All insist that workers must pay for a crisis that they did not cause, in order to restore the auto companies to profitability so they can once again be a lucrative source of income for corporate executives and big investors who are responsible for the financial catastrophe.”
http://www.wsws.org/articles/2008/dec2008/auto-d12.shtml
Cowboy,
Read the posted article!
The section 341(a) Meetings are generally scheduled with a lot of hearings listed for the same time. The scheduling constraints of most trustee’s calendars usually limit each creditor to a few minutes at the 341 meeting. They are held generally in order, but sometimes people do not arrive on time, so the order may be a little different. The debtor must appear at the meeting and answer questions under oath about his assets and liabilities.
The United States Trustee (a lawyer) presides over the meeting. A series of questions are asked:
Standard questions asked by the trustee at the 341 meeting include:
* Did you read the schedules before signing?
* Did you list all of your assets?
* Did you list all of your debts?
* Are the schedules accurate?
* Do you want to make any corrections to the schedules?
* Have you lived in this state for the past two years?
* Do you owe anyone domestic support?
* Are your cars insured?
* Do you have any expectations of inheritance or receipt of additional new assets in the near future?
* Have you destroyed your credit cards?
Secured creditors are more likely to attend. If there are creditors who think they may be defrauded, they may attend also.
If the debtor has a secured loan, he may be asked if he intends to “reaffirm” the loan, or if the creditor and the trustee may be interested in “abandoning” the asset securing the loan or securing relief from the automatic stay. A debtor who needs his car to go to work may typically “reaffirm” his car loan, agreeing to continue to pay it so that he can use his car to go to work.
Abandoning an asset securing a secured loan involves a petition to the bankruptcy court stating that the asset has no or little value, and asks that it be sold to satisfy the debt. Proceedings run more quickly if the debtor joins in the petition. This must be accomplished before the collateral is repossessed or the foreclosure proceedings are permitted to continue.
Im not gonna read your crazy jargon, but your question is fraudalent from the start. Yes, there are greedy capitalists, but this not necessiarly a bad thing. Afterall, they cannot steal your wealth through force or coercion, everything they do is on a voluntary basis. Only the government has the power to force you do something you dont want to do.
Businesss fail, this a part of nature, its like natural selection, those who aren’t able to please customers or make good products, go bamkrupt. ANd were all better off because of it. Stop listening to to Obama, just say No To NoBama.