By way of providing Indiana bankruptcy information, this week I’m commenting on major recent breaking stories to Bankruptcy in Indiana readers to help make sense out of the news. One major item that has come to a head is the Fair Financial bankruptcy and the indictment of Tim Durham and his partners.
There are several aspects of the Fair Financial matter than can help clarify the way the bankruptcy system works.
Bankruptcy Chapter 7 is also known as liquidation bankruptcy, because, after certain exemptions, debtors’ assets are sold, with the proceeds divided among creditors. Sometimes, particularly when it’s a business filing bankruptcy, the sale takes the form of an auction. Over my 25 year-long career, I’ve handled many cases of small business bankruptcy in Indiana, with many being Chapter 7 liquidation bankruptcy, where the owner has no intent to continue running the business.
As a debt consolidation lawyer and consumer bankruptcy specialist, I know that one thing common to all bankruptcies, whether filed under Chapter 7 or Chapter 13 bankruptcy law, are based on one principle: The bankruptcy system can function well only when all parties have the same full and complete information. That was not necessarily the case at the start of the Fair bankruptcy.
- As one of the Columbus bankruptcy lawyers who is my colleague remarked, the investors in Fair Financial are already seeing “bids”. There are few physical assets to auction, but what is happening is that different investment companies are bidding on the claims investors have. For example, if an investor is suing Fair Financial for $100,000, a bid might come in offering to pay a settlement now of some fraction of that, perhaps $5000. Since the case might take years to settle, elderly or needy people who lost money in Fair Financial might well take an offer to receive at least some of their money back if they can get it now.
But, (and here’s the point I want to make for Bankruptcy in Indiana readers), the bankruptcy trustee will be in charge of the entire process. One of the main advantages of the bankruptcy process is that it brings order to a messy situation.
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg