“Extreme Makeover” home in Atlanta in bankruptcy to prevent foreclosure

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

Extreme Makeover home in foreclosure

A home in Clayton County, refurbished by the ABC TV show “Extreme Makeover”, was set to be auctioned but the couple who owns it filed for bankruptcy.

From the article:

A Clayton County couple living in an “Extreme Makeover” home delayed foreclosure Tuesday for a second time by filing for bankruptcy.

Milton and Patricia Harper and their three sons will continue living for now in the 5,300-square-foot home constructed four years ago by the ABC television show that rebuilds or refurbishes homes for families in need.

The house was scheduled to be sold on the Clayton County Courthouse steps Tuesday, but the auction never happened. Court records showed Milton Harper filed Monday for Chapter 13 bankruptcy, which stalls the foreclosure.

In the bankruptcy filing, Harper said he owes $100,000 to $500,000 to creditors, including the mortgage company, six credit cards, two pawn shops and Sprint. Harper says he owns the same range amount in assets. He is scheduled to meet April 21 with creditors.

The Harper home was rebuilt for free when the television show’s producers learned the family was having septic tank problems. In addition to the $450,000 remodeling, the show gave the family $200,000 in cash.

The couple borrowed against the house to start a business and ended up with a $450,000 mortgage. After struggling several years with finances, the couple faced foreclosure in August. The house was saved then by a loan modification.

After defaulting on that loan, the house was again up for auction Tuesday.

Obama’s statement on campaign trail about bankruptcy/foreclosure reform

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

Obama’s campaign statement on mortgage crisis

Here’s President Obama’s statement from about a year ago on mortgage/bankruptcy reform.

President Obama to unveil mortgage foreclosure plan on Wed., 2/18

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

Report: Falcons will trade Michael Vick after completion of criminal case

by Sundeep Kothari

Atlanta, Georgia Bankruptcy Attorney

Falcons to trade Michael Vick

The Atlanta Falcons will trade former starter and All-Pro Michael Vick upon completion of his sentence for criminal convictions related to dogfighting.

Vick filed for Chapter 11 bankruptcy protection in July 2008.

Muzak Holdings files for Chapter 11 bankruptcy protection

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

Muzak files for Chapter 11 bankruptcy

Fort Mill, S.C.-based Muzak Holdings, the company that makes music commonly heard in elevators, shopping malls and stores, files for Chapter 11 bankruptcy protection.

NY Times calls for credit card reform

by Sundeep Kothari, Roswell, GA Bankruptcy Attorney

NY Times Editorial on credit card reform

Excellent article on credit card reform.

One way to help the economy is simply if Congress were to pass a law limiting the maximum rate on credit cards to 15%. More people would pay down their credit card bills faster, which would leave them with more cash to spend in the economy. Also, there would be less second mortgages and home equity lines, leaving more money for individuals to improve their homes or invest.

This would be a very popular issue with voters, but for whatever reason this issue hasn’t gained steam with the American public.

GMAC awaiting approval of debt swap by shareholders to avoid bankruptcy

by Sundeep Kothari

Roswell, Georgia bankruptcy lawyer

GMAC awaiting approval of debt swap

One minute before midnight Friday is GMAC’s deadline for bondholders to swap $38 billion in debt for new bonds that are worth less money — a deal that could help the finance company avert bankruptcy and qualify to become a bank holding company.

Becoming a bank holding company would give GMAC access to financing under the $700 billion government bank rescue fund. The financing company needs about 75% of its bondholders to agree to restructure the debt.

The government has said GMAC must have $30 billion in assets to qualify as a bank holding company. The debt swap is a significant part of the financing arm’s attempt to raise that money.

If it fails to meet that target, bankruptcy looms as a real threat for GMAC, which once was General Motors’ (GM)crown jewel. GMAC has said that failing to become a bank holding company would have dire effects on its business.

Standard & Poor’s said earlier this month that failure would mean “the potential for a bankruptcy filing would be high.”

However, President Bush’s decision last week to use federal financing to help bail out the automakers could be a good sign for GMAC, says Himanshu Patel, an analyst at JPMorgan.

 

“GMAC will probably be safe, regardless of GMAC’s bond-exchange results,” Patel said in a recent research note. “We think Treasury will take the needed steps, in the end, to help GMAC remain solvent.”

So, GM is in good shape, but not totally out of the woods yet. Yesterday, I was reading how Detroit’s unemployment rate right now is at 21%. If the Big 3 had been allowed to go into bankruptcy at this point, that number might have reached 30-40%.

That doesn’t change the fact that the Big 3 still don’t have a realistic plan to make cuts and reorganize to adapt to today’s market. They still are running their companies like it is the 1960s or 1970s or 1980s.

Factors used in lowering credit card limits

by Sundeep Kothari, Atlanta-Sandy Springs Bankruptcy Attorney

Factors used in lowering credit card limits

This article discusses factors that credit card companies use when lowering credit card charge limits.

These include payment history, whether you exceed your credit limit, credit history with other credit cards, where an individual shops, whether other individuals who shop there default on their cards, which mortgage company you have, if you live in an area with falling housing prices.

Many companies are saying they can no longer guarantee customers will be considered low risk if they pay their bills on time and don’t exceed their credit limits.

Shake it like a Polaroid Picture: Polaroid files for Chapter 11 Protection

by Sundeep Kothari

Polaroid files for Chapter 11

Polaroid, famous for its instant film (which is no longer in production), files for Chapter 11 protection.

Polaroid’s owner Tom Petters, is under criminal investigation for fraud.

“Doug Kelley, the court-appoint receiver who oversees Polaroid and a number of other Petters companies, said that a tight credit market and the taint of Petters’ pending criminal charges in an alleged investment fraud scheme have hurt Polaroid’s efforts to obtain financing to help it to move from the old, instant film technology into the digital arena.”

The beat of large companies who have overextended themselves goes on.

Dealing with credit card line cuts

by Sundeep Kothari

Credit Card Cuts

 

This article discusses the reasons for the expected $2 trillion in credit card line cuts and some strategies for how consumers may deal with those cuts.

Congress considers $15 billion bailout for Big 3 automakers

by Sundeep Kothari

Congress mulls $15 billion bailout

Stunned by the loss of 500,000 jobs, the worst month in 34 years, Congress is considering a $15 billion bailout for the automakers.

Speaker Pelosi has dropped her opposition to re-directing a previously passed $25 billion loan to the Big 3 automakers for the development of environmentally better, more fuel efficient cars. This is something that President Bush supported.

There is no support whatsover from Congress to take a portion of that $700 billion and give it to the automakers. But there is enough support to change that loan and release those funds to the Big 3.

Credit card lines to be cut by $2 trillion

by Sundeep Kothari

Credit card lines to be cut by $2 trillion

Credit card companies are expected to cut credit lines by $2 trillion over the next 18 months.

This will lead to a sharp drop in consumer spending, which will lead to more trouble for retail businesses, which will lead to retailers laying off workers, which will lead to more foreclosures, which will worsen the economy.

But since banks have no money to lend out, they have no choice.