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Council Bluffs Bankruptcy Law Blog

Cointerra files for Chapter 7 bankruptcy

Adverse financial circumstances can cause a multitude of negative consequences for businesses and consumers. For businesses, this could mean closing their doors for good. Sometimes these financial circumstances are so unbearable that Iowa companies file for bankruptcy to preserve their businesses. In one such recent case, Cointerra filed for Chapter 7 bankruptcy to liquidate its assets.

At first, Bitcoin gained popularity globally after being launched in 2008. Companies use miners to fix serious issues with software and verify transactions. Cointerra is a Bitcoin mining company, but in the last year, the dollar dropped to nearly 70 percent.  In addition, the company was faced with millions of dollars in debt.

Solar energy company files for bankruptcy

Often, one huge circumstance can cause a downward spiral in someone's finances. Most Iowa consumers and businesses file for bankruptcy when the debts are out of control. Recently, it was reported that the owner of a solar company submitted a bankruptcy filing.  

The business was once growing at an accelerated rate of speed, but now, the company apparently owes millions in back taxes and debts. Back in 2011, Inc. Magazine recognized the company for its accomplishments, and in 2012, it was included in the Hall of Fame of the county's Chamber of Commerce. However, in 2013, the company laid off employees and closed its doors. Reports indicate that the company owes hundreds of customers money, and some are apparently owed thousands of dollars.

Pizza chain files for bankruptcy and closes its doors

There are many reasons why businesses would file for bankruptcy. A series of financial setbacks can lead up to bankruptcy filings, or it could be one major crippling event. Iowa blog readers may be interested in learning about a pizza chain that recently filed for Chapter 7 bankruptcy.

The business, HomeMade Pizza, is a chain that offers consumers pizzas that are ready-to-bake. It was created in the 1990s by two brothers-in-law in order to provide fresh ingredients, but unfortunately, it was not a profitable venture. Even though it was popular among fans, there was not enough of a revenue stream. According to the bankruptcy filing, the company has less than $50,000 in assets but owes over $10 million in debts.

Retailers often file for bankruptcy in January

Not only do consumers face financial dilemmas, but so do businesses. When Iowa businesses are on the verge of closing their doors, they often seek bankruptcy as an efficient way to relieve their debts. Reports indicate that January is the month of bankruptcy for many retail stores throughout the country.

Companies usually struggle when there is a lack of sales and not enough revenue. The companies struggle even more when payroll cannot be met and basic debts cannot be paid. When companies file for bankruptcy, they are allowed to pay out a fraction of what is owed to vendors and lay off employees. They are also allowed to shut down stores that are not successful. Several companies filed for bankruptcy in the last month, and these companies include Deb Shops, Mexx and Delia.

Pinkberry files Chapter 7 bankruptcy protection

Financial dilemmas can have a tremendous effect on consumers and businesses throughout the country. Many Iowa businesses with a huge debt load have even found themselves filing for bankruptcy in order to eliminate debts. In one recent case, a branch of Pinkberry frozen yogurt has filed for Chapter 7 bankruptcy.

The company has over $1 million in debts and only a little over $800,000 in assets. Pinkberry is asking for the company to be liquidated through Chapter 7 bankruptcy. The company has branches in other locations, but it's not known if they will stay in business in the long-run. It's a possibility that some of the locations will end up managed by the head corporation. At this time, the creditor that is owed the most is BB&T, and it is owed over $500,000.

Paying credit cards may now take priority over many medical bills

It's not uncommon for consumers to be faced with medical debt and credit card debt at the same time. Throughout the years, both debts have caused negative impacts on credit scores. Under these circumstances, Iowa consumers may wonder if they should make paying off medical bills or credit cards their first priority.

With the new FICO scoring, medical bills that were forwarded to collection agencies will not impact their credit scores as much. Since medical debt is no longer weighed heavily, consumers could benefit from paying their credit cards first. Credit cards have higher interest rates than medical bills and are more damaging to credit scores.

Holiday credit card debt expected to rise

As the year comes to a close, credit card debt may be getting even higher. With that being said, Iowa consumers and those throughout the country are expected to take on an additional $60 billion in credit card debt for 2014. Experts fear that Americans who have not reached their credit limits are on track to building more debt throughout the holidays.

In the recent quarters, outstanding household debt has increased, especially since more Americans are supplementing gaps in their income by charging their cards.  Limited wages and underemployment have contributed to consumers placing basic items such as groceries on their cards. A report from earlier this year indicates that lack of health insurance and job loss are the main indicators that show how low- to middle-income earners will build up credit card balances.

How medical bills affect credit scores may be changing

Medical debt affects a substantial amount of consumers throughout the country. Just a simple trip to the emergency room in Iowa can add up to hundreds or even thousands of dollars. The U.S. Consumer Financial Protection Bureau is trying to soften the blow that overdue medical bills have on credit scores.

Consumers may remember that several months ago, FICO revised the FICO 9, which is a credit score formula that is expected to reduce the impact of medical debts. This change was made because over half of delinquent accounts that are turned over to collections are medical bills. To support the reduced impact, the CFPB reminds credit bureaus and lenders that most are unaware of the cost of medical services and procedures until after they are performed. 

Accelerated ways to pay off credit card debt

Credit card debt is usually a financial burden for most people, especially when the interest rates are high. Iowa consumers could be stuck paying credit card debt for years before it's completely paid off. However, there are ways consumers can pay off credit card debt at an accelerated pace.

First, consumers will need to stop charging their credit cards until their accounts are at zero. Consumers can make a list of their debts and place them in the order it would take to pay them off. For example, a debt of $80 that has two months left to pay off might be placed first and then others would follow. Once one of the debts is paid, use money left over to pay the next debt.

Some banks are ignoring bankruptcy discharge

Many people who are unable to pay their debts file for bankruptcy. However, thousands of people in Iowa and throughout the country who discharged their debts through bankruptcy have found that the debts were still on their credit reports years later. Because of this, multiple banks and financial establishments are being investigated by the U.S Trustee Program.

Iowa residents may not be aware that some of the largest banks are keeping debts active on credit reports long after debts have been discharged by the courts. Once these debts are discharged, banks and other creditors must comply by revising credit reports to show that the debts are not active. Instead, some banks have tried to force consumers to pay for debts that they no longer owe. The U.S. Trustee Program is investigating certain banks, including Synchrony Financial and Bank of America, for ignoring discharge orders, which is a violation of federal bankruptcy.  

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