The decision to allow Chrysler to avoid legal responsibility for any future product liability or other personal injury claims stemming from products sold before June 10 was a controversial one. Personal injury attorneys, consumer advocacy groups and Attorney Generals from at least 8 states all contested the bankruptcy court’s decision. They argued that the bankruptcy court’s ruling raised important constitutional questions about whether the court has the power to take away a person’s future right to sue, particularly when the injury has not even occurred.

The opposition’s arguments, however, were not successful and the court eventually granted the automaker the immunity it wanted, deciding that it would be unfair to make the new Chrysler responsible for any injuries caused by the old Chrysler.

In what many believe to be a peculiar twist, the new Chrysler has promised to uphold the warranties of any vehicles sold by the company prior to the bankruptcy. Many are left asking why Chrysler will agree to replace any defective parts on their cars but will not be responsible if one of those defective parts results in harm or even the death of a driver or passenger in a Chrysler vehicle.

Normally, when a person is injured in an accident and it is determined that a part or component of the vehicle was defective, thus causing the injury or worsening it, the person has the right to file a products liability claim against the manufacturer. At the time Chrysler filed for bankruptcy protection on April 30, it had approximately 300 such claims pending against it.

However, the new Chrysler can only be held responsible for any legal claims arising from products it sold after the bankruptcy. This means that if someone bought a Chrysler vehicle on June 9 and is subsequently killed because of a defectively manufactured part in the car, the person’s family will have no legal right to sue the company for their loved one’s death.

Further, the new Chrysler is not responsible for any of the legal claims pending against the company or that had been settled but not yet paid before the bankruptcy. All of those people were forced to take their place in the long line of unsecured creditors against the old Chrysler to fight over any assets that might be left over to pay their claims after the bankruptcy.

Many argue that the bankruptcy court could have taken a different route to ensure those with legitimate legal claims against the company were not left out in the cold. For example, the court could have handled the case in the same manner as the asbestos litigation was handled when the manufactures of the dangerous product went bankrupt. In the asbestos case, the bankruptcy court set up a victim compensation fund so that people at least received some type of remuneration for their injuries. However, it doesn’t appear that this option was even seriously considered in the Chrysler bankruptcy, particularly when the company argued it had no money left to pay any of the legal claims pending against it.

Now, General Motors is seeking the same immunity protection in its fast-track bankruptcy filing and all indications seem to suggest that the biggest US automaker will get it. Between Chrysler and GM, the two companies are responsible for putting nearly 4.5 million cars on the road in 2008 alone. How many thousands of Americans may be harmed sometime in the future by one of these vehicles and be denied their right to compensation for their injuries?

Some consumer advocacy groups and certain attorneys have considered appealing the bankruptcy judge’s ruling. Whether or not the appeal will result in any real change is yet to be seen. Until then, those who purchased Chrysler vehicles before this summer’s bankruptcy ruling are left hoping that their cars will continue to keep their loved ones safe.

Reference: Perrin Law Firm

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Bankruptcy Doesn’t Protect You Against Everything

It is a common belief that both incorporation and bankruptcy protect executives from personal responsibility for the business’s debts. This is true for most things but there are cases where an owner’s personal assets can be lost even in a corporate bankruptcy.

Businesses are expected to remain current on their payroll taxes and a bankruptcy attorney in New York can’t erase unpaid corporate tax bills. This is especially true for payroll taxes deducted from employee paychecks. Not only will reorganization not eliminate those debts, but the owner can be personally liable for the expenses. In a large company this amount can run into millions.

Another situation to avoid is the appearance of fraudulently obtained debt. Floundering businesses often seek additional credit, hoping to shore up their finances before bankruptcy becomes necessary. During this time owners must be scrupulous about reporting the company’s true financial situation. If any information is omitted or altered, even inadvertently, the government may claim the debt is fraudulent thus exempt from both bankruptcy and corporate protections.

Finally, some owners may develop personal attachments to corporate property such as a company vehicle. Transferring business assets to the personal possession of executives or their friends and family to avoid their loss in bankruptcy not only looks suspicious but will be discovered. It could lead to criminal or civil penalties.

Know What to Keep Current On

Even while engaged in bankruptcy proceedings, it is important to maintain certain payments. A bankruptcy attorney in New York can give a comprehensive list but several things top the list.

If a business lets liability or other insurance lapse during the proceeding, it will be very difficult to find anyone willing to cover the business after bankruptcy. As long as the business pays the premiums, the insurance company can’t cancel the policy. Stay current or even pay ahead to ensure coverage is continuous during reorganization.

Many rental and utility agreements contain stark warnings about cancellation in the event of reorganization, but any bankruptcy attorney in New York can tell you these clauses are nearly impossible to enforce. However if you miss payments, they are likely to be less lenient than they would be with more solvent companies.

Look over the company’s leased equipment. Maintain payments on equipment that needs to be retained after reorganization. Any items that won’t be needed under the new structure should be returned to the leasing company. While this will incur a deficiency debt of the amount between the current value of the item and the current balance of the lease, this debt will be eliminated by the bankruptcy.

About the Author:

Author is a freelance copywriter. For more information on a bankruptcy attorney in New York, visit http://www.bankruptcynewyork.com/.

Chrysler: Only “New Chrysler” Customers Need Apply

When the “new Chrysler” emerged from bankruptcy on June 10, 2009, the company received a very important gift from the bankruptcy court: no liability for any product liability claims stemming from vehicles manufactured by the automaker pre-bankruptcy.

This means that if a consumer bought a vehicle manufactured by the “old Chrysler” but was not injured until after the company completed the bankruptcy, the person will be unable to recover anything for their injuries from Chrysler.

Under the terms of the automaker’s bankruptcy, the new company only can be held liable for injuries stemming from vehicles manufactured by the new company. Any harm that is caused by vehicles manufactured by the old company, regardless of when the injury occurs, is not “new Chrysler’s” problem. The company was given a free pass to walk away from these claims because the bankruptcy court felt it was “unfair” to make the new company responsible for any injuries — no matter how severe — caused by products built and sold by the old company.

GM: Timing is Everything

After the news came out about the deal Chrysler was able to negotiate in its bankruptcy, the focus quickly turned to General Motors as concern grew that the auto giant would be granted similar limits on liability. Several State Attorneys General, consumer advocacy groups, tort lawyers and victims injured by defective GM vehicles spent three days explaining why allowing the company to limit its liability was unacceptable and unfair to the injured.

Partly due to increased public scrutiny, GM eventually agreed to fewer limits on liability than those granted to Chrysler. According to the terms of its bankruptcy, GM will accept liability for any injuries caused by GM products, so long as the injury occurs after the company emerged from bankruptcy, regardless of when the vehicle was purchased. A victim of a defective GM product now has a claim if he or she were injured on or after July 10, 2009, the closing date for the new GM, and if the claim arose from the motor vehicle’s operation or performance. However, just like the Chrysler bankruptcy, the new GM was relieved of its financial and legal obligation for any products liability claims existing against the company at the time it entered bankruptcy or before July 10. GM claims arising between June 1 and July 10, 2009 are in a middle ground and those claims may be handled by the bankruptcy court and possibly may receive some compensation but only to the extent that there are any assets left in old GM.

An Unjust Result for the Injured

Americans harmed by GM and Chrysler vehicles prior to each company filing for bankruptcy have been abandoned by the car manufacturers. These Americans have been left on their own to cover all of the expenses — including life-long medical treatment or death in some cases — for injuries they didn’t cause.

The results of these bankruptcies are absurd. Even though GM accepted more liability than Chrysler, the fact that an arbitrary date is the deciding factor of whether or not someone can bring a valid products liability claim is ridiculous. Consumers placed their trust in these companies and the products they sold. It is completely unfair and unjust to allow GM and Chrysler to turn their backs on those injured by their defective products.

Better Options than Limited Liability

The decision to give the car companies limited liability makes even less sense when the bankruptcy court had other options available to ensure a better result for consumers, including creating a victim’s compensation fund and requiring the companies to buy liability insurance policies to cover the claims.

Chrysler and GM were not the first companies to file for bankruptcy that also happened to have outstanding products liability claims against them. When asbestos manufacturers went bankrupt, the bankruptcy court created a victim’s compensation fund to help provide some compensation to those who were injured by the companies’ products. A similar fund could have been created for those harmed by defective vehicles, but this option was never seriously considered. Both GM and Chrysler argued that they simply did not have the funds at the time they entered bankruptcy to pay for the outstanding legal claims against them.

Requiring certain automakers to carry liability insurance is another option being debated on Capitol Hill. The Jeremy Warriner Consumer Protection Act of 2009 was introduced into the House of Representatives at the end of June. The Act would require any car manufacturers who are owned by the federal government or who have received loans from the federal government to purchase liability insurance to cover personal injury claims. If the Act is passed, both GM and Chrysler would have to buy liability insurance and injury victims who otherwise would not be able to sue the car companies could seek compensation under the insurance policies.

Attorneys have promised to appeal the bankruptcy court’s decision in the GM case all the way to the US Supreme Court, if necessary. However, it is unknown at this point if any changes will result from this attempt, given that a similar petition made by lawyers on behalf of consumers harmed by Chrysler products was previously denied review. Unfortunately, it seems likely that many who have been injured by defective GM and Chrysler automobiles will be left without assistance from the responsible companies

Reference: Butler, Wooten & Fryhofer, LLP

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Under the new bankruptcy law, the bankruptcy court judge will be the one to decide whether you can file for a Chapter 7 Bankruptcy and get discharged from your debts. First you have to go through a “means test” which calculates your income, your monthly expenses and your financial capability as a borrower. If you passed the test, that’s the only time you can file for a Chapter 7 Bankruptcy. If you fail, the judge will require you to file for a Chapter 13 bankruptcy.

Getting Out Through Home Equity
A Chapter 13 bankruptcy will put you in a repayment plan, which means you still have to pay off your debts. However, through bankruptcy, your debts will be reduced and your creditors will be giving you a much lower interest. Under the bankruptcy provision, creditors can only impose up to 10% of interest rate to their debtors. Furthermore, the New Bankruptcy Law has made all repayment plans to be a mandatory five-year term. This gives you a better chance at getting out of your debts more easily.

If you filed for a Chapter 13 Bankruptcy, there is a way to make things even better for you. By using your home equity to repay your outstanding debts, you have the option to pay off your debts either in part or full payment. Acquiring for a home equity loan will also give you more time to pay off your debts. Inquire from your attorney about this option so that he can personally make the necessary preparations if you do decide to get a home equity loan. It is also interesting to note that a mortgage loan is a great way to rebuild your credit.

No Need to File for Bankruptcy
It is also worth asking if there really is a need for you to file for bankruptcy. Given the fact that the New Bankruptcy Reform Act has made the procedures more strict and more complicated, you might want to consider other options rather than filing for bankruptcy.

Since the Bankruptcy Law will require you to undergo credit counseling with an accredited agency six months before filing, the credit counseling agency can help you find a more appropriate solution to your debt problem. Here is where a home equity loan again comes as an option.

A home equity loan lets you borrow the money you need based upon the value of your home property. By paying your creditors with your home equity, you don’t even have to file for bankruptcy. Again, it will give you more time to make repayments and it will save your credit report from the record of bankruptcy.

However, before you do apply for a home equity loan, find a lending company who will be willing to give you better rates. Keep in mind that a home equity loan uses your home as a security so be aware about your payment obligations.

About the Author:

Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing bad credit loans and credit cards for bad credit.

The truth is, everyone can be at risk of bankruptcy even those who have lots of money in the bank. Take a look at the following most common reasons why people end up filing for bankruptcy:

Unfortunate Circumstances
Even rich people are affected by unexpected events that are beyond control. There may suddenly be an illness in one of the member’s of the family and their finances can slowly decline in just a matter of months or even weeks.

Natural disasters like hurricane, earthquake, and other accidents can happen at the most unexpected times. The change in the economy or the loss of job are all major events in life that can have a huge impact on a family’s financial status.

Shortsightedness
Knowing that the unexpected events can strike at any time, it is only fitting to do the necessary preparations. Do you set aside some of your money in preparation for such emergencies? Or do you spend every penny of your monthly income, confident that you’ll have enough salary the next month?

Do you have a savings fund you can rely on in case you got laid off from work or in case you got sick and unable to work for some months? Financial experts recommend having fund in your savings account which is enough to last your whole family for at least six months. This buys you some time if drastic changes in your lifestyle needs to be done.

Wrong Decisions
The looming possibility of divorce, gambling, reckless spending, self-destructive behavior, the lack of attention with the debts owed-all of these actions, sooner or later can lead to bankruptcy.

Investing in a business without doing extensive research or ensuring the legality of the business can also lead to sudden bankruptcy. These can all have been prevented if we only choose to make the right decisions. We have control over these things and if these actions are avoided, the risk of bankruptcy is greatly lessened.

Clearly, there is something people can do to avoid filing for bankruptcy. The first thing would be the awareness that bankruptcy is real and that nobody is exempted from this possibility. The government has introduced the New Bankruptcy Law in October of 2005 and according to this law, any one who wishes to file for bankruptcy must first seek credit counseling from a government approved agency at least six months before filing his bankruptcy application.

Latest statistics show that there has been a drop in bankruptcy cases from 100,000 each month in the past years, to only 30,000 cases per month in 2006. This dramatic drop can be due to the new rules and restrictions that have been included since the Bankruptcy Abuse Prevention and Consumer Protection Act took effect.

About the Author:

Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing bad credit loans and credit cards for bad credit.

Do not rush into buying a home immediately after bankruptcy. The first appropriate action would be to obtain a copy of your credit report from the three major credit bureaus (Equifax, TransUnion or Experian). Check if there are any mistakes on your report especially on the accounts filed under bankruptcy or has been foreclosed. If you find any incorrect detail, notify the major credit bureaus right away.

Rebuilding Your Credit
Opening new accounts should be you next step. By rebuilding your credit before applying for a mortgage loan, you can avail of better rates from your lenders. However, do not submit too many applications to different creditors. Choose the accounts you would like to apply for very careful. If these applications are rejected by the lenders you applied for, it can also pull down your credit score.

It’s best to start with lenders that are more lenient on their policies. You can get a credit card, a department store card, or a gas credit card to start rebuilding your credit. Remember that the only way to improve your credit history is to pay off your debts religiously.

As much as possible, you need to achieve a credit score above 600 to prepare you for your next mortgage. If you can push your credit score above 600, you can easily qualify for a mortgage loan with 100% refinancing. This means, you don’t need to give a down payment.

Saving for a Down Payment
Don’t forget to save for a down payment of at least 20% or more while you’re rebuilding your credit. In case you get a credit score of 600 and below, you will be required to put down at least 20% on your mortgage loan.

If you don’t have enough to put down on your loan, you can avail of assistance programs like Neighborhood Gold or the Nehemiah program. These special programs help consumers who are in need of down payment for their mortgage loan.

You can also seek financial assistance for your relatives. If you borrowed your down payment from your relatives, this would need to be disclosed with your lender.

Buying Home After Foreclosure
Now that you’re ready to obtain a mortgage loan, remember the lessons you learned in your past mortgage. Choose your lender very carefully. Always compare different lenders before settling on one. Don’t forget to ask for a copy of a Good Faith Estimate of Costs from your lender days before the closing. This copy should clearly contain all the exact costs you will be paying on your closing together with the agreed interest rate.

Have a lawyer to represent you during the closing to make sure that the contract you will be signing is legal and fair. After closing the deal, be aware of your obligations as the borrower and see to it that this time, you will be finishing this loan and get full ownership of your home soon.

About the Author:

Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing bad credit loans and credit cards for bad credit.

However, despite everything you can do, sometimes there just isn’t enough money when the paycheck comes in. Sometimes this can lead to a late credit card or bill payment. When that happens, it is easier for things to spiral out of control. As interest piles up, debt becomes greater and greater. Soon it may become almost impossible to pay off the accumulating debt.

However, people with excessive debt need not despair. For people in these types of situations, there are options and solutions for becoming debt free. One of these is debt counseling. Many companies offer the services of experienced financial specialists who can help people with excessive debt get their lives back into control. This may include a debt management plan or debt consolidation.

A debt management plan or DMP is involves the debt counseling and management company working with your creditors. By negotiating with your creditors, a debt counselor may be able to work out a repayment plan that is more realistic. This may include reduced payments and interest rates for you, the client. Usually the creditor will close the customer’s accounts and restrict the account from future access. One benefit of a debt management plan is that your debt counselor might be able to negotiate with your creditor for reduced interest rates, as mentioned before. This can save you several years of payments. Someone with a defaulted credit card account may be paying interest rates as high as 30%. At that rate, it could take as many as twenty years to pay off a large amount of debt.

Another benefit of debt counseling is debt consolidation. Very often a person with excessive debt has multiple sources of debt, such as multiple credit cards and loans. Often the combined monthly total of this debt is more than the monthly income of the debtor. This is one of the most crippling aspects of excessive debts. One of the benefits of a debt counselor is that they may be able, through negotiations with various creditors, to consolidate all of your monthly payments into one payment. Often, this payment is lower than the combined sum of the former payments.

By using these tools, a debt counselor can help a person with excessive debt get out of debt in a much shorter period of time. Finding a trustworthy debt counseling company can help bring your life back into financial order and freedom.

About the Author:

DebtGuru (http://www.debtguru.com/) is the Internet domain for American Credit Foundation, an IRS 501 non-profit consumer credit counseling organization and offers debt consolidation help. Art Gib is a freelance writer.

Sometimes, the hardest thing to do is making the right decision or forming a good opinion.

People who are looking for a potential debt consolidation strategy should consider these five key points before agreeing to sign on the dotted line.

1. What impact will this debt consolidation strategy have on my finances; is the very first point that you should consider when presented with a debt consolidation option. If you are not sure how to measure the impact, begin by measuring how it affects your cash flow-does it improve or reduce the cash flow. After measuring your cash flow, then look at whether or not the overall interest rate you are paying is apt to be improved, sometimes cash flow can be improved only by paying a higher interest rate.

2. The next key point for consideration is how much will pursuing this debt consolidation strategy cost; sometimes debt consolidation can cost more than the strategy is worth. It is quite true if collateral is involved, like automobiles, real estate or other assets of value. There could be penalties when breaking out of existing credit arrangements before they mature, such as mortgages and auto leases, so when consolidating, consider the impact of such costs and how long it will take to recoup them.

3. Is it possible that debt consolidation will have an adverse effect on my credit standing?. Depending on the creditor in question, may be better to maintain existing debt instead of rolling it into a debt consolidation loan with a high risk lender, because not all credit is equal.

4. Many lenders will impose certain conditions when it comes to obtaining credit of any type and some of these conditions may have to be met before the advance is made. For example, you might need to surrender and close credit cards before a consolidation loan is funded and other conditions may be required to maintain the credit. Make positively sure you understand the conditions of such a loan before signing for a debt consolidation loan.

5. Can loan consolidation fix an underlying problem with my finances; to ensure that you can fix any problem and make sure you will not encounter the same problem again, you have to understand the root of the problem.

Some other unmet need may be the driving force of your spending habits, if your credit card debt is continually being racked up year after year. What is driving people to spend more than they earn needs to be understood and understanding this about yourself is really important if you want to enjoy long-term financial success.

Everyone has their own opinion on debt consolidation strategies, but when debtors are confused, they have to look closely at facts and figures that are not driven by emotion.

Visit TFGI.com for great debt consolidation and also a great quote for your consolidation loan

The best way to get out of debt is to do it on your own, but keep in mind that this will not work for all situations and there are other alternatives if you feel you need more help managing your accounts. Debt management plan step-by-step instructions are available in a number of excellent books on the market.

Before you can do anything you have to make a list of what you owe and who you owe it to. I believe that starting with the account that you owe the least on is the best way to go. Some might say that you should start with the account with the highest interest rate and pay that one first and there is nothing wrong with that plan. The reason for paying the lowest first is you feel accomplishment sooner and it will keep you motivated to keep moving forward.

Pay minimum payments on all your accounts and pay as much as you can towards the account you have selected to eliminate first. Once you have paid it off, select another account as your target account and follow the same process. Since you have already paid off your first account, you should have more money to use when paying off the second account. If you follow this procedure you will soon begin to see your debts decrease as well as your stress level. You can get your life back on track with debt management help. Debt can be one of the most challenging things a person can deal with, but there is help available.

Private Student Loan Bad Credit

Credit card debt doesn’t shy away from anyone who doesn’t want to shy away from it. It treats everyone equally irrespective of whether the person is a seasoned professional or wholly a college student. So college student credit card debt isn’t uncommon either. Since the credit limit on college student credit cards is much lower, the college student credit card debt cannot move up to the levels it does for other credit cards. However, college student credit card debt is an allineate bigger menace because a lot of students are already in debt due to the loan diehards* charge taken for their education. If they pass out of college with college student credit card debt, they will come at to payback not just the loan they taken for studies but also their college student credit card debt.

So what do we mean by credit card debt consolidation loan?

Put simply, credit card debt consolidation loan is a low interest loan that you apply for with a bank or financial institution in order to clear off your high interest Private Student Loan Bad Credit. So credit card debt consolidation loan too is based on same principle as balance transfers i.e. moving from one or more high interest debts to a low interest one. The credit card debt consolidation loan has to be paid back in monthly instalments and as per the terms and conditions agreed between you and the dispenser of credit card debt consolidation loan.

Consolidation Lender Loan Student, in general terms, is an unsecured loan i.e. doesn’t require you to pledge any security. However, if you have a really bad credit history and you want go for credit card debt settlement benefit credit card debt consolidation loan, the credit card debt consolidation loan will take the form of a secured credit card debt consolidation loan. Incredible type of credit card debt Consolidating Student Loans requires you to pledge a security e.g. the home owned by you or something else strictly speaking has a expense which is comparable to your credit card debt consolidation loan amount. So, worse the credit rating, the more difficult it is to get a credit card debt consolidation loan.

College student credit card is really meant to be treated like a training ground for learning more about credit cards. It should not be make an instrument of Private student loan consolidation.