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Detroit Bankruptcy Delayed by Weather


It is amazing that something as simple as weather can delay a bankruptcy for a major city. Detroit had a strict trial schedule for resolving the bankruptcy. However, with the recent cold wave, the court has delayed many of those proceedings. That is not really surprising when you think about it.

A town in the northern area has one major part of their budget that they do not have control of. That is ice and snow removal. In a mild year, the spending can be relatively light. In a cold year such as this, more and more of the discretionary spending disappears as the city has to divert more and more money for road work. Other parts of the budget are quickly affected.

The Bankruptcy Court must oversee the budget and help the city come up with a plan for emerging from their bankruptcy. The Court is faced with the same problem that the City of Detroit is faced with. The Court does not know how much money will be needed for road maintenance related to weather either. This is not a huge problem because bankruptcy courts are used to dealing with changing budgets.

If you are having difficulty with your cash flow, it is a good idea to seek professional help and see a qualified bankruptcy attorney. Most good bankruptcy attorneys will give you a free consultation at no risk. You then can decide if you need the professional help.

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Liquidation

By J. C. Bailey III

As I presented a young couple with some of their financial options the other day the option of filing a Chapter 7 Bankruptcy was discussed. The term “liquidation” is used to differentiate a Chapter 7 from some other options and for some reason the word stuck in my throat. In Texas we have a long tradition of protecting our citizens from being stripped to the bone during the course of financial crisis. The term I used could easily be interpreted as meaning that this couple would have to surrender their house and cars along with personal effects and furnishings. THIS IS NOT THE CASE. Numerous exemptions allow property to be protected under the Bankruptcy code and allow you to get a FRESH START. Don’t let misinformation or frightening words force you into bad decisions. Get advice from a knowledgeable experienced professional who is on your side.

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Detroit Given The Green Light to Proceed With Bankruptcy


Many of the media talking heads have expressed some surprise that the bankruptcy judge has given the City of Detroit permission to proceed with the bankruptcy. Several hundred people and entities objected to the fact that the bankruptcy was filed and basically argued that it would not be fair to them. Neither the press nor the individuals who objected really understood bankruptcy. Many individual who seek help from a bankruptcy attorney are similarly worried that the creditors can “stop” them from filing. It does not work that way. Bankruptcy is viewed from the perspective of the person or entity which needs help. So, in the Detroit case the judge reviewed the facts and determined that the only solution for the City of Detroit is to proceed with the bankruptcy.

If you are in a bad financial situation where you cannot escape your finances without help, see a qualified bankruptcy attorney. At Bailey & Galyen, we care about the situation you are in and will try very hard to help you out. Will bankruptcy work for everyone? Absolutely not. That is why we offer a free, no-obligation appointment. We will go over the facts of your individual case and let you know what options are available. We will give you non-bankruptcy options as well.

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How do firefighters die?

By J. C. Bailey III

I’ve seen movies and television shows about firefighting and am acquainted with numerous first responders. I would think the biggest risks would be smoke inhalation or being trapped in a collapsed structure. I would be wrong. In their excellent book “Scarcity” Sendhil Mullainathan and Eldar Shafir point out that firefighters are dying in motor vehicle accidents at an alarming rate. They point out that although these professionals are wonderfully prepared for emergencies they become so focused on responding to the fire that they neglect to fasten their seat belts. They would never drive their personal vehicles without wearing seat belts, but the time scarcity of responding to the emergency causes them to “tunnel”, “to focus single mindedly on managing the scarcity at hand”.

The scarcity for those first responders is a lack of time. For many of us it is a lack of money. Our single minded focus on making this month’s payment can cause us to ignore the consequences of the further extension of credit, the cash advance, or the payday loan. One of the best ways to avoid this destructive and potentially financially fatal tunneling is to talk to a professional. A consultation with an objective party could help you stop the cycle of borrowing at punitive interest rates in order to survive the month. There may be alternatives to the vicious cycle you find yourself in and the professionals you speak to will not be surprised nor judgmental about your circumstances.

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Rebuilding after bankruptcy

When many people think of bankruptcy they often think it is the end of their financial futures. Not only does bankruptcy need not be the end of your financial future, it can truly be the fresh start that gives you and your family a chance at a brighter financial future. Rebuilding your financial life is a puzzle that can be put together if you know how the pieces of your financial life work together. Here are some tips to make the most of your fresh start:

  1. STEADY INCOME IS KING: One of the first things creditors look at when considering a loan is your income and work history. The better your income and steadier your work history, the more likely you are to get a loan, even after a bankruptcy.
  2. GET A CREDIT CARD (BUT JUST ONE!) As long as you have a job, you will probably start getting pre-approved credit cards within months of getting a bankruptcy discharge. Here are the rules on rebuilding your credit with a credit card- (1) make a purchase on the card every month but never let the balance exceed 20% of the available credit, and (2) pay the card down to a $1.00 balance every month. You are probably saying “Shouldn’t I pay it off completely every month?” The answer is “NO!” The reason is that the credit scoring system gives you fewer points if you pay off a credit card completely every month vs. leaving a small balance.
  3. DON’T HAVE ANY POST BANKERUPTCY BAD CREDIT: This one speaks for itself.
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