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Hudson Valley Bankruptcy Law Blog

Bankruptcy: An opportunity for financial recovery after illness

A recent article from the Huffington Post raised a frustrating fact that far too many Americans are dealing with at this very moment: Most people are just one devastating health diagnosis away from financial devastation.

According to recent studies, including one that was conducted last year, medical debt is the No. 1 reason Americans file for bankruptcy.  Even people with health care coverage that they thought was decent can end up in way over their heads with debt following a major health problem. 

Why to think twice before co-signing for a loan

When a close friend or family member asks you to co-sign a credit card, mortgage or loan for them, you might feel obligated to help that person out. However, you should only do so knowing the effects co-signing for a loan can have on your own financial situation.  

Here are a few things to consider:

The loan will be just as much your debt as it is theirs. That’s because when you co-sign, you are telling the lender that you are equally responsible for the debt until it is repaid. 

Big tax bill often accompanies student loan disability discharge

An unexpected disability or serious medical condition can cause a world of hurt for New York residents. Not only does the individual endure expensive medical bills, he or she is often left unable to work. Before the person knows it, bankruptcy is the only option for getting out of debt.

However, as many people know, bankruptcy usually does not wipe out the hefty student loan debt that so many Americans have today. Luckily, the Department of Education has recently made it easier for people with “total and permanent” disabilities to have their student loans discharged.

Payday loans can turn credit from bad to worse

Many people in the Hudson Valley have heard of payday loans, but few understand exactly how they work. Essentially, the services are for people who need money before their payday has arrived.

The consumer writes a check for the amount of money being loaned with their payday’s date. The company then hands over the money, minus the interest fee. On the payday, the lender either cashes the check or charges the consumer more money in order to extend the loan for more time.

Quizno's files for Chapter 11 bankruptcy protection

This month, two well-known restaurant chains have filed for Chapter 11 bankruptcy protection.

First, it was the New York-based pizza chain Sbarro that announced it was filing for bankruptcy for the second time since 2011. Days later, the sandwich chain Quizno's announced it too was seeking Chapter 11 bankruptcy protection.

When New Yorkers crave a hot sandwich on the go, they have dozens of restaurants to choose from. This tough competition is why the sandwich chain says it's in serious financial trouble. It was announced last week that the Denver-based company is between $500 million and $1 billion in debt.

Retailer Ashley Stewart files for Chapter 11 protection

A Chapter 11 bankruptcy allows businesses going through financial hardships to stay afloat by restructuring debt. Depending on the size of the company and the complexity of the financial situation, it may be possible for a company to land back on its feet after only a few months.

Recently, a women’s plus-sized clothing retailer announced that it was filing for Chapter 11 bankruptcy and will be closing more than two dozen stores around the United States. The retailer, Ashley Stewart, is based in New Jersey and has several stores in New York. 

Familiar New York pizza chain may file second Chapter 11

Some lenders are willing to take an ownership stake and equity in trade for forgiving debt owed by businesses. A financially-troubled company takes a hard hit by making deals like this but accomplishes a large goal – survival. Debt relief for Hudson Valley businesses can come in many forms, including one bankruptcy and sometimes more than one.

Sbarro Italian restaurant chain, headquartered in New York, is expected to file for Chapter 11 bankruptcy for the second time since 2011. Insiders reported the company is suffering from high debt and slow store traffic, especially in mall locations. The business apparently has been evaluating operations for much of the last year and, last month, decided to shut down 155 North American outlets.

Sandy-hit hospital's Chapter 11 bankruptcy to include asset sale

The success of Hudson Valley hospitals is dependent on finances, just like any other business. When debts are out of control, companies sometimes make plans to reorganize with or without the help of a Chapter 11 bankruptcy court. Insurmountable debt also may force complete liquidation or a sale.

New York's Long Beach Medical Center had more debts than assets in 2012, operating at a loss of a $4.8 million. A natural disaster pushed the financial problems over the edge. In October of that year, Hurricane Sandy swept in and ravaged the acute-care facility.

Owners of Hudson Valley Brookstone store may file Chapter 11

Ulster County businesses can suffer from slow growth, high debt, flat sales, new competition and poor collections. Any one of these financial problems might be overcome in time, but add one on top of another and a company can be in danger. When business debt becomes unmanageable, the only possible solution may be filing for Chapter 11 bankruptcy.

Gadget and gift retailer Brookstone Inc. has 250 airport and mall stores in the U.S., including a shop in the Hudson Valley's Poughkeepsie Galleria. The company will be in business 50 years in 2015, provided Brookstone can overcome its present financial troubles. That may not be so easy.

Quick fixes can make Hudson Valley debt problems worse

"Over your head" and "drowning in debt" are descriptions of people with financial problems larger than they can handle. But, what do most individuals do? They try to save themselves with panicked quick fixes rather than seek a long-lasting solution.

During the recession years, it seemed like everyone across the country was filing for bankruptcy. Many Hudson Valley residents are still digging out from debt racked up from job losses or soured investments. Where do they turn for debt relief?

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