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Articles Posted in Business Bankruptcy

Earlier this month, a federal court approved the popular pizza chain Sbarro’s repayment plan as a part of its overall restructuring plan. The bankruptcy marks the second time in just three years that the chain has filed for bankruptcy.

pizza-1329803-mAccording to a recent article by Reuters, Judge Martin Glenn of a New York bankruptcy court signed an order approving the chain’s plan to cut its debt by nearly 85%, from nearly $148 million to about $20 million. Sbarro management believes that by slashing its debt it will be able to remain profitable and continue to pay back its remaining lenders.

Sbarro claims that a decrease in the overall popularity of malls has led to the decrease in revenue for the pizza chain that was founded back in 1956. As a part of the company’s restructuring plan, it will close hundreds of its restaurants across the country, focusing on keeping the more profitable restaurants open for business and cutting the less profitable ones.

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DON’T BANK WITH YOUR CREDITORS

Most people think that when they deposit their money in the bank or credit union, either in a checking or savings account, that the money is sitting in a lock box with their name on it, readily accessible at any time. The reality, however, is somewhat different. When you deposit your money in the bank, the cash does not in fact sit in a lock box with your name on it. The bank uses that money to make loans to other customers. After all, that’s how the bank makes money, loaning it out and charging interest. Where do they get the money to do that? From you of course, with the money you have deposited.

So let’s say for example that you deposit $1,000.00 in your checking account at Trusty Bank. Let’s assume that the checking account pays .25 interest. You have in effect loaned the bank $1,000.00 at a very low interest rate. They will then use your money to make a loan to someone else at a much higher interest rate. The difference between the interest rate they pay you and the interest rate they charge on the money they loan out (your money) is their profit.

Documents to Gather and Organize for Bankruptcy

If you are considering filing bankruptcy in the near future, it is important that you start preparing now. One of the keys to a successful bankruptcy filing is having all of the proper documentation gathered and organized prior to the date you intend to file your case. This will avoid delays in the filing and/or the granting of your discharge.

Below is a list of some of the documents you should start gathering:

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