No 'Squid Game': South Korea's real-life debt trap

SEOUL - Many small business owners in South Korea recognize themselves in the cash-strapped characters of the wildly popular Netflix drama 'Squid Game', who vie desperately for a chance to win $38 million, exposing a debt trap that is all too familiar.

Nearing retirement at 58, Yu Hee-sook paid off her debts long ago, but still gets calls from collection agencies threatening to seize her bank accounts, as the loans got securitized and sold to investors without her knowledge.

"In Korea, it's like the end of the world once you become a credit delinquent," said Yu, who got by on small jobs, such as writing for movie magazines, during the 13 years it took to pay off the debts she incurred over a movie that flopped in 2002.

"All I wanted was chances to repay debt, but banks don't let you make money," added Yu, who feels trapped in an unforgiving life-long ordeal, just like the 456 game show contestants of the 'Squid Game'.

While foreigners may associate South Korea with the boyband BTS and sleek Samsung smartphones, the drama points to a dark flipside of rising personal borrowing, the highest suicide rate among advanced nations, and the rarity of getting free of debt.

Record household borrowing is fueling private investment and housing growth, but unforgiving social mores about debt often blur the line between personal and business loans, burdening those who run small businesses.

Personal bankruptcies soared to a five-year high of 50,379 last year, court filings show.

The proportion of those falling behind on more than one type of personal debt payment has risen steadily to reach 55.47% by June from 48% in 2017, figures from the Korea Credit Information Services show.

"If Donald Trump was a Korean, he probably couldn't have become the president, having been bankrupted many times," said a lawyer in Seoul, who specializes in personal bankruptcy.

"In the United States, corporate debt is more separated from personal debt."

An inadequate social safety net for small entrepreneurs and the lack of a rehabilitation program for failures spell risks that could drive some South Koreans desperate, and banks often ignore a five-year limit to destroy insolvency records.

"Due to traditional practices in the banking industry, business owners in South Korea face high likelihood of taking the debt burden from the business they run," said bankruptcy judge Ahn Byung-wook.

Banks often demand that business owners stand as joint surety for the firm's borrowing, a practice the government banned for public financial institutions in 2018, although three owners told Reuters some providers persist.

Applicants for business loans who have poor credit ratings or a history of default need guarantees from state-run financial institutions in South Korea.

"Culturally, failed entrepreneurs are socially stigmatized, so starting over is hard, as people don't trust them," added Ahn, who has spent four years at the Seoul Bankruptcy Court.

"On top of that, those who file personal bankruptcy face a long list of restrictions on employment."

The numbers of South Korea's self-employed rank among the world’s highest, forming a quarter of the job market, making it vulnerable to downturns. A central bank study in 2017 showed that just 38% of such businesses survive three years.

Still, as economic prospects dwindle, with South Koreans chasing fewer good jobs amid surging home prices, many are betting that speculation is the only route to wealth, and have taken on more debt than ever to buy stocks and other assets.

Household borrowing is roughly equivalent to GDP at a record 1,806 trillion won ($1.54 trillion) in the June quarter.

"The government encourages startups but they don't take care of the failed businesses," said Ryu Kwang-han, a 40-year old entrepreneur who exited the debtor rehabilitation program in 2019 but still struggles to get loans.

"How is this different from 'Squid Game' if there's no second chances?"

The global sensation has been watched by 142 million households since its Sept. 17 debut, the world's largest streaming service has said, helping Netflix to add 4.38 million subscribers.

-reuters

Pioneering videogame firm Atari gets lifeline

PARIS — Atari, the pioneering video game company mired in bankruptcy proceedings in both France and the US, said on Tuesday it had found a last minute buyer after the latest leading shareholder gave up on turning the company around.

Atari SA “supports the proposed acquisition of the BlueBay Funds’ interests in the Atari group by a longtime videogame professional and a fund advised by Alden Global Capital,” the videogamer said in a statement.

Atari was born 40 years ago in California and jumped to fame by bringing the arcade game experience to living rooms worldwide with games such as Pong and Centipede.

The key buyer of the embattled company is Frenchman Frederic Chesnais, a former Atari executive, who is picking up 25 percent of the Atari SA’s capital through his own fund Ker Ventures for 400 euros with hedge fund Alden providing financing.

“I made this move because I love the team, I know about games, I love the brand and in the past we have all spent nights and days to make it shine,” said Chesnais who becomes Atari chief executive with the deal.

“I am just given a few weeks to put the Company back on track and I have to give it a try,” Chesnais said.

In the buyout which includes taking over debt, Alden and Ker Ventures agree to pump 5.0 million euros ($6.7 million) in Atari’s US activities where the company hopes to break through.

source: interaksyon.com

Can You File for Mortgage Bankruptcy?

Have you fallen behind in your mortgage payment?  Do you worry about losing your house or creditors calling you?  If so, you are not alone.  Since 2008, many people have had to leave their homes because they could not keep up with the monthly payments and were eventually foreclosed on.  Thousands of homes sit empty because people bought homes with alternative mortgages such as 0% down or adjustable rate mortgages.

If you now find yourself unable to keep up with your mortgage payments, you have a few options.


 Can You File for Bankruptcy on Your Mortgage Alone?

If you are behind on your mortgage payment but not on the rest of your obligations, unfortunately, you cannot file for mortgage bankruptcy alone.  Likewise, if you are behind on your second mortgage but not your first, you can’t file for bankruptcy on just the second mortgage.



When you file for bankruptcy, you must include all of your debts.  Creditors can no longer contact you about repayment.  If you file for Chapter 7 bankruptcy, you will lose your home as it will be liquidated to help cover your debts.  If you can afford to make payments on your debts, a far better choice is to file for Chapter 13 bankruptcy as your home and retirement, among other assets, will be yours to keep.

What Other Alternatives Are There to Filing Bankruptcy?

If you only want to file bankrupcty due to your mortgage, you have a few other options available instead of filing bankruptcy.

1.  Apply for a mortgage modification.  Many, many Americans have been able to keep and stay in their homes over the last several years thanks to loan modifications.  You can apply for a loan modification whether you are current in payments, behind, in foreclosure or filing for bankruptcy.  The bank often prefers to work with you on a mortgage modification so that they can get their money.  Foreclosing on your property also costs the bank money and time that they would rather not spend.

2.  See if you have enough equity in your first mortgage to become current on your second.  If you are current on your first mortgage but behind on your second mortgage, you can see if you have enough equity in the home to refinance.  You can then take the money from the first mortgage to help you become current with your second mortgage.

3.  Stop making payments temporarily.  If you simply need some breathing room financially, you can stop making payments temporarily.  The bank will eventually begin the foreclosure process, but in some states, when you make another payment, the foreclosure process has to start all over again from the beginning.  Of course, this is not the ideal way to go.  Some people believe this is unethical, and you do run the risk of losing your home.

If you are behind on your mortgage and considering filing bankruptcy, remember that there are other alternatives before you take such a drastic step as filing for Chapter 13 or 7 bankruptcy.  Often the best choice is to contact the bank, explain your situation and see if they will be willing to work with you.

source: everythingfinanceblog.com

File Bankruptcy to Get Off Mortgage With Ex?

Dear Bankruptcy Adviser,

My ex-husband and I divorced in 2005 and he kept the house. The problem is that we agreed to everything but didn't specify that he must get my name off the house in the divorce papers. So we both have remarried and he has been late on the house payments, which is affecting my credit and preventing me and my husband from getting a home loan. My ex-husband is missing payments. He does get caught up, but this has occurred on and off. It also means he cannot refinance because his credit is poor and now mine is, too. So my question is: Could I file bankruptcy and list only the house so that I am no longer responsible for it? Also, if I did file, would that affect me being able to get a loan for a house?

-- Kathy

Dear Kathy, Most things in life are not as simple as we want them to be. I respect that you just want to be done with the ex-husband and the past. Your approach may work, but not as easily as you would like it to.

If you are eligible for the Chapter 7 bankruptcy, it would eliminate your liability on the mortgage but it would not remove your name from the property title or the mortgage loan. You may have signed your name off of the title during the divorce, but your ex-husband would have to refinance the mortgage to take your name off the loan.

Here are the issues you have to address.

Are you eligible for Chapter 7 bankruptcy? You did remarry. While you can file bankruptcy as an individual, you must qualify as a couple. Your new husband may have separate assets and those generally do not need to be listed in your bankruptcy. However, his income and any post-marriage assets must be listed in your case. So, you need to find out whether you are eligible for Chapter 7 bankruptcy.

Do you have joint accounts with your new husband? The bankruptcy will impact any joint credit card accounts that you have with your husband. He can keep paying and his credit should not be harmed, but the lender may place a notation on his credit report. That note will say, "Included in bankruptcy." I am not a credit reporting expert, but I have researched this issue and my research shows that this note should not impact his credit score. It may only require an explanation to future prospective lenders.

Know that all debt must be included. You cannot file bankruptcy only on some debt. You have to include all other accounts, such as credit cards or personal loans. Even accounts without balances will likely be closed. You can start over, but not with your current accounts.

What will happen to your mortgage with your ex-husband? The mortgage lender will receive notification that you have filed bankruptcy. The positive part is that future late payments will no longer report to the credit bureaus.

The negative part is that a future foreclosure will show up on your credit report. Your ex-husband may lose the house in foreclosure one, two or many years later. The lender would not have been reporting the late payments on your credit report all that time, but will report the foreclosure. That will definitely impact your credit.

Will you be able to get future mortgage loans? The bankruptcy will impact your credit for the next few years. Even though the bankruptcy notation stays on your credit for 10 years, you can get new credit sooner. Obtaining credit after bankruptcy is not impossible and your new husband could help you establish new, post-bankruptcy credit. Even though I do not endorse co-signing, it is a way for your current husband to help rebuild your credit faster.

You cannot expect to get a mortgage loan immediately after filing. Lenders want to see that you have established post-bankruptcy credit and confirm the bankruptcy case was filed more than two years ago.

As I said, this is an option, but most things are not as easy as we would like them to be. You will have to do some research and may need to talk to a bankruptcy attorney before you take this approach.

source: foxbusiness.com

Bankruptcy: Debt forgiveness for honest debtors

CONTRARY to what others may think, the majority of people who file for bankruptcy are honest, hard working people who simply need to get a fresh financial start.  Because life is not perfect, there are times when we are so way in over our heads in debt that filing for debt relief becomes unavoidable. Filing for bankruptcy is NOT a crime. If it was, our Congress would not have passed laws that allow people to do it. Our bankruptcy laws, although they have changed to keep up with the changing times, have been with us for many decades and it is safe to assume that they will always be an important part of our legal system.

The “fresh start” concept of Bankruptcy is based on the idea of forgiveness. The honest debtor who either has limited or no resources to pay back creditors is given a chance to start a new life free from the burden of debts. If you’ve ever been in a situation in your life where you have fallen behind on debts and you are being harassed by creditors day and night, you know what I mean.

And although some creditors may agree to work with you while you’re going through a time of temporary financial hardship, in most cases the time that they give you is too short to be of any real help. And once you start falling behind, it gets harder and harder to catch up with each passing month because your bills begin to “snowball” in a very short period of time.  Some people erroneously believe that even if they fall 60-90 days behind on debt payments that they will retain their good credit standing with creditors. Remember that once late payments are recorded on your credit report, whether 30, 60, 90 or more days being late, that negative information stays on your credit report for 7 years from the date last reported.  Most people who file bankruptcy already have a tarnished credit rating due to delinquent payments. In the long run, filing bankruptcy can actually help rebuild your credit. And it doesn’t take that long to rebuild credit, either. You’ve probably heard of people filing bankruptcy and then being able to buy a house in as little as 3 years.

Filing for bankruptcy protection can help you protect your home, car, bank account and other assets. In a Chapter 13 debt consolidation, even non-exempt assets can be protected as long as a fair plan is feasible to pay debts over 3-5 years.  And if all or almost all of your debts are credit card debts, you can pay 0% interest, reduce your monthly payment to a very low amount (in a lot of cases, lower than 50% of what you are currently paying) and get out of debt in as short as 3 years. Filing for bankruptcy protection can also stop foreclosure on your home or other real property, perhaps eliminate a 2nd mortgage (to make your home more affordable), stop wage garnishments, bank levies and stop even the IRS if you owe back taxes. By consulting with a knowledgeable bankruptcy attorney, you may find out about options you didn’t even think you had.


So if you find yourself in a tight financial situation after being laid off from a job, being sick, going through a divorce, a failed business, a family or personal emergency costing a lot of money, or any other situation that was beyond your control, don’t lose hope and there’s no need to feel embarrassed about your situation.  Instead, take action now by finding out if bankruptcy can help you get the fresh start that you need. To schedule an appointment with our office, please call TOLL FREE 1-866-477-7772. We have offices in Glendale, Cerritos, West Covina and Valencia.

source: asianjournal.com

How to know it’s time to consider bankruptcy

ARE you being harassed by your creditors day and night due to unpaid bills? If you are, you know that this is a pretty unpleasant experience. You may feel scared, angry or embarrassed about your situation. The prospect of debt relief through bankruptcy may sound appealing to you but you are not quite sure if this is really the way to go. Perhaps you have heard good things and bad things about bankruptcy and you need to learn more about it before making a decision.

But just how can you tell when it’s time to make that move and declare bankruptcy? Of course, situations vary and whether or not bankruptcy is your best alternative will depend on the facts and circumstances of your case. But generally, the answer has to do with your ability to pay, which means that you need to consider your income, expenses, your assets and the amount of your debt. You also need to look at the types of debt you have.  For example, if you are dealing with nothing but IRS taxes and they type of taxes you have cannot be wiped out in bankruptcy, you may have other options in solving your tax problems besides filing for bankruptcy.

Generally speaking, however, here are a few questions you should be asking yourself to help you assess whether it’s time for you to consider filing for bankruptcy:  (1) Are you struggling to pay even the minimum payments on your credit cards? (2) Have you started borrowing money just to be able to cover your basic living expenses such as rent or mortgage, food, gas, etc? (3) Have you lost track of how much you owe? (4) Are bill collectors calling you because you have accounts in collection? (5) Have creditors taken legal action against you such as filing a lawsuit, obtained a judgment and threatening to garnish your wages or levy your bank account?

If you said “yes” to any or most of the above, you could be in a financial danger zone and you need to take action as soon as possible before your financial problems get worse. It may be time to face your financial reality instead of pretending that everything is “OK”. Perhaps you’ve been ignoring your pile of bills and the collection calls. But you’re only going to be able to do this for so long. Sooner or later, you need to face your creditors and do something to change your situation.

I believe that bankruptcy should be a last resort and that you need to exhaust all debt relief options before resorting to it. But I also believe that a lot of people put off the decision to file bankruptcy for too long that they needlessly suffer in debt when they could have acted sooner to rebuild their finances and their life.

Since 1997, I have helped thousands of clients get out of debt. Let me help you determine if bankruptcy is right for your situation. Call Toll-Free 1-866-477-7772 to schedule a free office consultation. We have offices in Glendale, Cerritos, West Covina and Valencia.

source: asianjournal.com

Michael Vick I've Spent $29 MILLION In Four Years

Michael Vick has blown through nearly $30 million since filing for bankruptcy in 2008 -- nearly 95% of his total income -- TMZ has learned.

According to legal docs filed in his bankruptcy case, Vick made $31 million since he went belly up -- that includes his Eagles salary and various endorsements and other business ventures.

The math is pretty simple -- Vick had to pay a total of $29.6 mil -- of that, $10.9 went to taxes, $9.2 mil went to creditors, $2.7 went to lawyers and accountants, and the rest is for various things, including child support and living expenses.

All tolled, Vick is now left with around $1.5 mil.  That's nothing to sneeze at, but considering what he made it's pretty shocking.

Things are looking up for the NFLer. Vick signed a 6 year, $100 million contract in 2011 ... with almost $40 mil in guaranteed money, so he won't be poor -- in rich terms -- for much longer.

source: tmz.com

Are your debt problems forcing you into bankruptcy?

ARE you having problems paying your debts? Are creditors calling you day and night threatening you with a wage garnishment, repossession or foreclosure? Are you starting to feel hopeless and depressed about your situation and don’t know where to turn for help?

The last few years have been tough for a lot of people. You may have suffered a job loss, foreclosure, lawsuit, divorce or other unexpected calamity and now find yourself overwhelmed with debt. You realize that your debt problems are not simply going to go away unless you do something about them but just don’t know where to start.

You have rights under federal law to file bankruptcy and get immediate relief from debt. Bankruptcy is nothing more than a legal remedy that allows you to regain control of your finances so that you can get back on your feet as quickly as possible. Of course, it is not the answer to all financial problems but when appropriate for your situation, it may be the only way for you to get out of the mess you’re currently in.

Although Congress enacted tougher bankruptcy laws in 2005, most people still qualify for debt relief, whether they are wiping out debts under Chapter 7 or reorganizing under Chapter 13. Depending on your circumstances, your debts can be wiped out under Chapter 7 in only a few months or the Court may ask you to repay your creditors with lower monthly debt payments over a 3-5 year period. Either way, the goal is to help you recover financially and help you start a new life free from the burden of excessive debt.

Briefly, Chapter 7 allows you to cancel or discharge your debts but in return, you must give up whatever non-exempt assets you may have. The good news is that most people don’t have much and whatever little they have, they are often protected by the exemption laws in bankruptcy. So it is a misconception that “once you file bankruptcy, you will automatically lose everything.” The truth is that most people keep everything they have (homes, cars, bank accounts, retirement plans, etc) and they lose nothing at all. An experienced and knowledgeable attorney can evaluate your case and help you plan so that you can maximize your exemptions and claim the full benefits allowed by law.

Chapter 13, on the other hand, is a debt reorganization or debt consolidation plan. The court requires you to submit all your income information as well as a monthly budget to assess your ability to pay. Your Chapter 13 plan payments will be based on the surplus income as determined by the Court. Chapter 13 allows you to keep valuable property such as your home or car (although you were behind on your mortgage and car payments at the time of filing) and will stop foreclosure and repossession immediately on the day your case is filed. Credit card debts are included in your monthly payment under Chapter 13 and, in most cases, they can be significantly reduced or even totally eliminated.

If you have a 2nd mortgage on your property that is wholly unsecured due to the fact that your property is “upside down”, you may even qualify to reduce or eliminate it in Chapter 13 through a process called “lien stripping”. This can help a lot of people who are struggling with more than one mortgage payment as it makes their home more affordable while at the same time reducing what is owed on the property. This is something that even a loan modification will not be able to do as principal reductions are very rare when doing a loan modification.

The only way to know if bankruptcy is right for your situation is to consult with a professional who has the knowledge and experience to advise you regarding your options under bankruptcy law. For a free office consultation, please call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos, West Covina and Valencia.

source: asianjournal.com

Purging taint of eve of bankruptcy car purchase

LET’S say you have 2 old cars, a 1995 Camry, and a 1990 Taurus. You have $100,000 of credit card debt. You and your wife are both registered nurses and your combined household income with both of you working 2 jobs each is $250,000. You lost two investment properties in Las Vegas resulting in one 2nd trust deed of $80,000 on collection and threatening to garnish your wages. Both the Camry and the Taurus need constant repairs. The last repair was $3,000. You decide to trade in both cars for a brand new MB E 350, and a Lexus 400. The payment for the M-Benz is $950 monthly and $900 for the Lexus. Because of the two car payments, you cannot pay the $3,000 monthly for interest on the credit cards. So, after 4 months, you decide to seek bankruptcy relief. Will the fact that you traded in your old cars for new cars which require almost $2,000 of monthly payments 4 months before bankruptcy affect your ability to get a discharge?

The general rule is there is nothing wrong with pre-bankruptcy planning. Debtor can convert non exempt assets into exempt, trade in assets and assume new debt to buy a new car if that is justified, right before bankruptcy. However, the circumstances are relevant. In this example, debtor should keep evidence of the $3,000 car repair bills because that is evidence that the cars needed to be replaced. But note that debtor in this example bought two luxury cars requiring $2,000 of monthly payments. In some cases, the kind of car purchased pre-bankruptcy does not raise a red flag. But I have heard a judge opining that if debtor bought a civic, that’s a normal car, but M-Benz is a luxury car. It all depends on what type of bankruptcy is being sought. In a Chapter 13, the trustee may raise a good faith issue if debtor attempts to deduct the new car payments in calculating the plan payment.

In Re Williams, six days before they filed for Chapter 13 relief, the above-median income debtors owned three cars: 1996 Buick Skylark, 2007 Lexus RX-400H, and a 2007 Lexus ES-350. The Buick was fully paid. They bought a new 2011 Lexus RX-350 SUV on August 5, 2011, for $47,000. They traded in the 2007 Lexus RX-400H and the 2007 Lexus ES-350 as part of the same transaction for which they received a net credit of $14,111. They borrowed $35,000 to pay for the new car, payable over 75 months at $565 monthly whereas the monthly payment on the 2007 Lexus RX-400H was $484 and $866 for the 2007 Lexus. There were 12 payments left on the former and 24 payments left on the latter. They filed for bankruptcy on August 11, 2011. The trustee objected to confirmation of their plan partially on the ground that it was filed in bad faith.

The court sustained the trustee’s objection and told the debtors they could confirm a plan only if they treated their creditors as if they had sold the ES-350 and kept the other two cars. The plan they proposed, which treated their car payments as if they had not purchased the new card, did not “purge the taint of the improper car purchase on the eve of bankruptcy.” The debtors argued that by replacing their current vehicle ownership expense deduction with what they payment would have been if they re-amortized the two car loans that existed before they purchased their new car placed their creditors in the same position that they would have been in had they not improvidently purchased the new car. “While this approach has some appeal, the court cannot accept it…” Perhaps the fact that the judge drove a Ford Focus, and the trustee, a Yugo, had something to do with this decision?

Would there be a difference in Chapter 7, or if the cars were purchased 4 months pre-bankruptcy, probably?

source: asianjournal.com

Greece to Present Debt Inspectors 'Alarming' Data

ATHENS, Greece (AP) — A spokesman for Greece's new government says it will present "alarming" data on its recession and unemployment to international debt inspectors this week, in a bid to renegotiate the terms of its bailout agreements.

Spokesman Simos Kedikoglou said in a television interview Tuesday that the data would demonstrate that the current austerity program was counterproductive. He did not elaborate.

Debt inspectors from the European Commission, the European Central Bank and the International Monetary Fund are due in Athens Wednesday.

Greece is relying on rescue loans from its partners in the eurozone and the IMF to avoid bankruptcy. It is in a fifth year of recession, with unemployment topping 22 percent, roughly double the eurozone average.

source: nytimes.com

Bankrupt Gary Busey Acting Crazy for $4,500 a Week

Just 3 months after filing for bankruptcy, Hollywood legend Gary Busey caught a lucky break -- snagging a steady paycheck by "playing" a crazy person on TV -- but he's still light years from digging himself out of debt.

As TMZ previously reported ... the broke-ass actor filed for chapter 7 bankruptcy back in February, claiming to owe a colossal $500k plus to creditors.

Sources tell TMZ ... Busey is officially back on the employment bus -- he just booked a new scripted pilot, "Mr. Box Office," with Bill Bellamy (above) -- where the actor will play a science teacher who thinks he's an alien from another planet, named Cordar.

We're told Busey will be raking in around $4,500 per week -- per union rules -- playing the delusional, bonkers type character (which is sure to test his acting chops).

According to our rock-solid calculations ... it will take Busey at least 111 weeks of steady shooting to pay off his massive debt ... and that's if he doesn't spend a dime on anything else.

Looks like he'll have to settle for old moccasins and VHS tapes a little while longer.

source: TMZ

Octomom Nadya Suleman Files for Bankruptcy

Not even posing nude could save her from losing her shirt.

Nadya "Octomom" Suleman has filed for Chapter 7 bankruptcy protection, listing only $50,000 in assets against up to $1 million in debts, according to papers filed April 27.

"I have had to make some very difficult decisions the year and filing Chapter 7 was one of them," she tells E! News. "But I have to do what is best for my children and I need a fresh start."

The mom of 14, who recently stripped down in a magazine for $8,000, doesn't specify the names of her creditors but provided a clue in the list of those receiving the bankruptcy papers.

It includes Verizon Wireless, Sparkletts, Indy Mac Mortgage, Orkin Pest Control, the Department of Motor Vehicles, a Christian school, and the gas, electric and water utilities.

Explaining why she appeared topless in the U.K.'s Closer magazine, Suleman, 37, who gave birth three years ago to octuplets to go with six other kids, told Anderson Cooper, "I have to do what I have to do to take care of my family."

source: people.com

U.S.-backed battery firm Ener1 seeks Chapter 11 bankruptcy

U.S. government-backed battery supplier Ener1 has filed for Chapter 11 bankruptcy, the third U.S.-backed energy company to file in as many months.

Ener1 posted a notice today stating that it "has reached agreement with its primary investors and lenders on a restructuring plan that will significantly reduce its debt." This action will pave the way for up to $81 million for recapitalization, the company said.

A "pre-packaged" Chapter 11 case was filed in U.S. Bankruptcy Court in the Southern District of New York. Ener1 is planning to complete the restructuring process within 45 days.



"This was a difficult, but necessary, decision for our company," Ener1 CEO Alex Sorokin said in a statement. "Our business plan was impacted when demand for lithium-ion batteries slowed due to lower-than-expected adoption for electric passenger vehicles," he added.

Its already precarious position was exacerbated when it lost a major customer, Think Global, which filed for bankruptcy in June 2011. "For which we were exclusively providing commercial lithium-ion battery packs," Sorokin said.

Ener1 has also had trouble competing with battery companies in China and South Korea, where manufacturing costs are lower, according to a report. That is not unlike statements solar system manufacturer Solyndra made when it filed for bankruptcy in August.

And U.S.-based energy storage company Beacon Power filed for bankruptcy in November. Both Solyndra and Beacon Power received loans through the Department of Energy's Loan Guarantee program, though Beacon still has a shot at emerging from Chapter 11.

Ener1 is the parent of a company that received a $118 milliont U.S. Energy Department grant to make electric-car batteries.

The New York-based company listed assets of $73.9 million and debt of $90.5 million as of December 31 in Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan, according to Bloomberg.

In the State of the Union speech Tuesday night, President Obama said "some companies will fail" but promised he would "not walk away from the promise of clean energy."


source: http://news.cnet.com/8301-13924_3-57367210-64/u.s.-backed-battery-firm-ener1-seeks-chapter-11-bankruptcy/?tag=mncol

How a bankruptcy lawyer will help you?

 Are you currently in severe trouble with your creditors due to failing to pay the mortgage loans on-time? In this case you will need to contact a bankruptcy attorney to address the entire available options to come out of the case. Look for a lawyer within your surrounding area while it will make things better for each of you anytime you work with your problem.

Several bankruptcy attorneys give you free discussion and you're not obliged to utilize the lawyer immediately. There are number of causes for you have to appoint a bankruptcy attorney:

Manages lender harassment

The moment you told your creditors that you have maintained lawyer, dependent on law they also have all legal rights to still approach you. You must tell your bankers that you have hired a bankruptcy attorney and then tell them to call his/her agency. The attorney will certainly work with those harassing collectors and strive to reduce those banker calls.

Saves from indecisiveness

Bankruptcy hearing has numerous ins and outs. It's important to handle the queries made by the court judge, you must interact with the trustee who deal with the case and also you need to master the debt collectors. Preventing all these things can be quite annoying since you don’t recognize how the approach will harm the bankruptcy case. A bankruptcy attorney understands precisely how to progress with all these issues.

Saves with the things that you are not aware of

A successful bankruptcy attorney can do the very best for you. Filing on your own may decrease the effectiveness of bankruptcy.

Handles the faults

Completing all of the paperwork just isn't simple. As an example, most people assume that in case they decide to keep their car which they shouldn't use in your application. Finally this will certainly produce a terminated case. Generally there are multiple techniques to keep the car, but it should be indexed thoroughly by adding precise facts on the right area. You will save considerable amount of time and also money you'd commonly need to pay for some other vehicle. Making a mistake can keep you at risk of repossession or possibly liquidation of your home and any other resources you need to protect.

Bankruptcy procedures are actually adjusting in numerous procedures, therefore the paperwork should be done accordingly. Filling properly and accurately is the most important action for the valuable petition. Whenever anything is misplaced, then your application would be terminated.

Whenever you go with an experienced bankruptcy attorney, you're featured with the required sources, information as well as assistance to help you make knowledgeable options and have a thorough knowledge of the bankruptcy approach.

Bankruptcy lawyer Riverside can help you a lot to make your bankruptcy petition successful. To know more about bankruptcy filing, you can consult a bankruptcy attorney Riverside.

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