The laws of the time allowed the debtor to choose between giving his property up or himself as repayment (Amega). The history of bankruptcy law consists of three phases (Duhaime 2007)
Bankruptcy Concept History and Evolution of the Bankruptcy Law General Concept The Bankruptcy Code The Bankruptcy Process Advantages and Disadvantages, Alternatives Myths about the Bankruptcy Law Bankruptcy is now known as a federal court process aimed at helping individual consumers and businesses get rid of their debts or to set up a plan to repay them with the protection of the bankrupt courts (Jackson 2006)
. bankruptcy legislation to make it easier to reorganize a business that has failed, as opposed to dissolve it" (Swedberg)
" Currently, it is typical for a Chapter 7 filing to cost about $1,000 in attorney's fees, but at minimum with the new legislation the cost of filing for Chapter 7 could go up, on average, to the $2,000 to $2,500 ranges. (Sahadi, 2005) According to a recent April 21, 2005 AP Wire, "The law, which will take effect in six months, will force many people to work out repayment plans instead of having their debts erased," repayment plans that require financial industry insiders to understand -- thus forcing the consumer to go into more debt to pay these advisors
" Currently, it is typical for a Chapter 7 filing to cost about $1,000 in attorney's fees, but at minimum with the new legislation the cost of filing for Chapter 7 could go up, on average, to the $2,000 to $2,500 ranges. (Sahadi, 2005) According to a recent April 21, 2005 AP Wire, "The law, which will take effect in six months, will force many people to work out repayment plans instead of having their debts erased," repayment plans that require financial industry insiders to understand -- thus forcing the consumer to go into more debt to pay these advisors
And 10 to 15% of households with credit card debt are barely able to pay it off," in fact this new piece of legislation advances a number of factional interests in Congress at the expense of other interests. (Willis, 2005) While the financial industry and credit card companies may be pleased by the 2005 legislation, consumer groups and legal action groups are not
Bankruptcy In 2004, Interstate Bakeries, the maker of well-known food products such as Twinkies and Wonder Bread, filed for Chapter 11 bankruptcy reorganization. The move was necessitated by rapidly growing expenses and market share losses resulting from the company's slow reaction to America's low-carb craze (Twitty)
There is an automatic stay on all non-secured debts collections, lawsuits, foreclosures or repossessions. The time that the organization buys for the company is usually just the amount of time it needs to reorganize and get back into healthy control of the company's operations (Dorward, 2012)
Also, the downgrade had an immediate effect state and local bonds in the immediate Washington D.C. vicinity (Goldfarb, 2011)
Seemingly, since Chrysler also had to go into Chapter 11 restructuring, the industry type does not seem to be the issue here. It seems simple politics is in the game, while only some companies have to tighten their belts (Gregory, 2012)
Analysis-Comparison and Contrast The Chapter 11 bankruptcy that was announced in November of 2011. Its most recent incarnation has entailed the announcement of 14,000 staff cuts in order to cut costs and chart a way out of bankruptcy (Hicken, 2012)
Another major aspect in GM's plan to cut costs -- outsourcing; the company has made a major push to begin importing most of its units from China. In this, it will cut its North American models, "GM will cut it's North American nameplate lineup from 48 down to 36 by 2012," (Lassa 2009:1)
GM is said "to tighten their belts, slash production costs, and make the most of their $15.4 borrowed billion by outsourcing to China," (Leech 2009:1)
There still are large risks that the company will not meet even minimum projections and fall under. Also risky from outsider's perspectives, is CEO Henderson's move to not alter GM's product planning group, "Yet it has routinely missed major product trends and rarely sets them," (Welch 2009:2)
Personal Bankruptcy The context of challenging economic times has resulted in sharp increases in the rates of personal bankruptcies filed in the United States (Athreya, 2004)
, 2006). Another factor that may potentially be involved in the rise observed in personal bankruptcy is changes in credit market competition in recent years within the United States (Dick & Lehnert, 2010)
Certain research has determined that approximately 54.5% of personal bankruptcies may be attributed to medical problems, and this issue represents a serious and significant threat to the solvency of middle-class Americans who would never have considered themselves at risk prior to the medical event (Dranove et al
, 1988). Completion of Chapter 13 plans and requirements is significantly related to factors such as job tenure and home ownership, while dismissal is associated with factors like never being married, having children that are dependents, having filed previously, and higher mortgage arrears (Evans & Lown, 2008)
The three reasons listed above account for the vast majority of filings for personal bankruptcy, as less than 9% of filings are from individuals who have not experienced loss of employment, a serious medical event, or divorce (Bankruptcy Action, 2011). The number of individuals filing for personal bankruptcy due in part to divorce has been increasing sharply in the past couple of decades (Fisher & Lyons, 2006)
(2009) investigated the relationship between gambling at casinos and rates of personal bankruptcy in the United States. Findings of this study indicated that if a county has at least one casino, this factor alone accounts for an increase in rates of bankruptcy by 9% in the first year that the casino is operational (Goss et al