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Simon, Fitzgerald, Cooke, Reed and Welch
Simon Fitzgerald, LLC
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Shreveport Bankruptcy Law Blog

Financial crises that can lead to bankruptcy

If you have found yourself in financial trouble, you are not alone. You may even know friends or family in Shreveport who are also struggling to make ends meet and have either filed or considered filing for bankruptcy. Throughout the United States, many people view bankruptcy as failure when, in fact, bankruptcy is a tool that can help people like you climb out from underneath excessive debt.

There are many reasons that people go bankrupt from simple mismanagement to high and unexpected expenses. Here are some of the most common financial mishaps that can lead to bankruptcy.

Did your holidays end in credit card debt?

Many Louisiana residents are currently winding down their holiday seasons, perhaps some with a few outstanding party dates that were postponed in the new year. While most people enjoy celebrating with friends, family members and co-workers, it is also not uncommon for people to feel relieved when the festive season comes to a close. All the shopping, gift buying and wrapping, and other "leg work" that goes into a typical holiday season can leave consumers feeling exhausted, overworked and stressed about the credit card debt they may be left with when all is said and done.

Current data shows that nearly 30 percent of consumers who used credit cards for last year's holiday expenses have still not paid off their balances. There are several ways to gain the upper-hand over post-holiday debt. There are also support options available for those whose financial situations have gotten out of hand, with no feasible means to pay off debt.

Several major department stores sought Chapter 11 debt relief

As retailers take their first steps of a new business year in 2019, they are gearing up to try to stay afloat as they compete in an e-commerce world. Last year brought serious financial challenges to many businesses that have been household names in Louisiana and across the country for decades. Sears, in fact, had been in business for more than a century before owners determined a need to seek immediate debt relief.

Brick and mortar stores have a tough time staying on top when so many consumers would rather click a link to make a purchase rather than drive to a store and risk not being able to find what they want, only to stand in line at cash registers if they do put an item or two in their shopping carts. Some stores, such as Walmart and Target, remodeled numerous store buildings and also added special features to their customers' online shopping experiences, such as faster shipping. Sears and several other retailers who did not take similar precautions have filed for Chapter 11 bankruptcy or other debt relief options to help overcome their current financial crises.

Chapter 7 bankruptcy: Make sure you qualify before you file

Many Louisiana residents will likely be among others throughout the nation who face serious financial crises in the post-holiday season. Fortunately, there are typically numerous options to help those in need obtain immediate debt relief and lay the groundwork to get their finances back on track. In order to apply for relief, such as Chapter 7 bankruptcy, however, one must first meet pre-application qualifications.

This type of financial relief is based on income. In short, if a person earns too high of an income, then he or she will not qualify. To determine whether a particular income level is within qualification limits, an applicant must take and pass a means test.

Senior center in another state seeks immediate debt relief

Many Louisiana business owners are currently facing serious financial problems. Fluctuating global, national and local economies can cause unexpected financial crises that are difficult to resolve. As one business in a bordering state has determined, it is sometimes better to seek immediate debt relief than to try to stay afloat without outside support.

A company in a nearby region happens to be one of the largest senior centers in its state. This particular company has approximately 11,000 employees at numerous facilities, some of which are located here in Louisiana. The facilities also house approximately 10,000 patients. Some of the company's centers will reportedly be transitioning over to new operators as the current debt resolution plan is executed.

Missed a payment? Here's what happens in Chapter 13 bankruptcy

If you are entering into Chapter 13 bankruptcy, it is important that you know what happens if you miss a payment. Missing a payment is a significant issue, because you need to make sure everyone is paid on time. If you miss a payment, there is a chance that your case could be dismissed.

The good news is that a single missed payment isn't the end of the world if you're quick about fixing your mistake. If you can make the payment before your trustee has to make the payments that they pay out once a month, then your trustee may not even notice that it was late. However, if you don't make it before the payments are due, you could be in trouble.

Will debt relief keep USA Gymnastics from being decertified?

Gymnastics enthusiasts in Louisiana and throughout the nation are likely familiar with USA Gymnastics, the national governing body for the sport. Chairwoman for the board of directors in the organization recently announced that board members have made a collective decision to file for Chapter 11 bankruptcy as a means of immediate debt relief. Chapter 11 is one of numerous types of bankruptcy that often help struggling businesses stay afloat. 

In the case of USA Gymnastics, extenuating circumstances have placed the organization in a position where its certification is at risk for being revoked. The situation involves a medical doctor who, for years, tended to the health needs of the organization's athletes. Sadly, more than 300 of those athletes have filed 100 lawsuits against USA Gymnastics because of the doctor's alleged inappropriate conduct while carrying out his medical duties toward the gymnasts.  

Former TV celebrity, facing Chapter 13 complications

Louisiana residents who are currently facing serious financial quandaries are definitely not alone in their struggles. Such crises are also not isolated to the general population, as even many celebrities have sought immediate debt relief, such as Chapter 13 bankruptcy, when they've been unable to resolve their money problems. A former star of a popular TV series, "American Chopper," which stopped in airing in 2010, is trying to save his home from foreclosure.

Paul Teutul, Sr., who starred in the show along with his son, is known for creating some of the most unique, custom-designed motorcycles in the world. The duo's show was popular for approximately seven years, before going off the air. In fact, many motorcycle enthusiasts still watch the reruns on cable TV.

Avoid credit card debt during the holidays

The holiday season is just around the bend and many Louisiana residents are already stressing over the expenses they know they will face when entertaining relatives and friends, purchasing gifts and traveling. Nothing can put a damper on holiday cheer quite like credit card debt. It is difficult to celebrate knowing there will not be a way to pay off the credit card when the bill comes due.

There are several things consumers can do to try to avoid racking up high debt during the holidays. The first is to write out a budget plan. While many people focus their spending thoughts on buying gifts, there is a lot more to holiday spending, including food, wrapping supplies, decorations and perhaps even new clothing; traveling from house to house also means filling the gas tank more than usual, which adds to personal expenses. Writing and sticking to a budget plan can help keep costs low.

Attention Louisiana brides: Popular dress shop seeks debt relief

Walking into a David's Bridal shop in Louisiana or other state often leads to scenes of smiling brides and their various entourages of mothers, prospective mother-in-laws and numerous bridesmaids, matrons, flower girls and other friends. The popular bridal gown store not only provides a wide variety of choices for those preparing to exchange marriage vows but also for any number of other formal wear occasions. Just because a store is often full of potential customers, however, does not guarantee that everything is going well financially for the owners; as for David's Bridal, the company recently took steps to seek immediate debt relief.

David's Bridal company owners say their plan will allow them to drop approximately $400 million in debt. Thankfully, the particular payment restructure plan the company has secured allows their 300 stores, as well as their online markets, to continue operation without interruption. A spokesman for the company said owners are thrilled that they will be able to resolve their current financial problems while continuing to carry on 60 years of tradition in providing luxury gowns for their customers.

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