Introduction

Introduction for Bankruptcy Paper
By Katie Harber

Bankruptcy. The word flies through the air, and everyone stops. That one word is sure to silence many of the most talkative people. Those people automatically assume that you are completely out of money and are about to ask them for a loan. What they don’t know is that bankruptcy isn’t all that bad. Recently, Delta Airlines has been "deep in bankruptcy proceedings" (Crescimanno 2005). Much like many other people, when I first heard that Delta was filing for bankruptcy, I immediately thought they were going out of business. However,myfather quickly correctedme. He told me that Delta had only filed for bankruptcy and was not actually going out of business. This made me very curious; how could companies have no money and file for bankruptcy yet manageto stay in business? It made no sense. So,I decided to research the topic.

I found that bankruptcy is basically a way that people in debt can pay off their financial obligations, and there are different types of bankruptcy. Chapter 7 is liquidation, the selling of your assets “in anticipation of going out of business” (Dictionary.com liquidation, 2005). Chapter 13, or rehabilitation, is where the person in debt is allowed to pay back the money in installments. In other words, the debtor sets up a payment plan with the person to whom he owes money (the creditor). Often, some of the debt owed is cleared by the judges. With the new laws Congress has made in the past few years, bankruptcy is more difficult to file for than it used to be.

Official Bibliography

"Bankruptcy: An Overview." Law About. Legal Information Institute. 26 Oct. 2005 http://www.law.cornell.edu/topics/bankruptcy.html.

"Bankruptcy Liquidation." Bankruptcy LawFirms.com. 2005. 01 Nov. 2005 http://www.bankruptcylawfirms.com/Bankruptcy-Plan.cfm.

Bijlefeld, Marjolijn, and Sharon K. Zoumbaris. Teen Guide to Personal Financial Management. Westport: Greenwood Press, 2000.

Crescimanno, Greg. "Delta's Bankruptcy, Repercussions, and the Future of Air Travel." Signal Online 11 2005. 06 Nov 2005 http://www.gsusignal.com/vnews/display.v/ART/2005/10/18/43572d3d2461d.

Dictionary.com. 2005. 04 Nov. 2005 http://dictionary.reference.com/

Legal Helpers.com. 2005. Macey & Aleman. 01 Nov. 2005 http://www.legalhelpers.com/index.html.

Morgan, Tom. Money, Money, Money. : G. P. Putman's Sons, 1978.

More Quotes/ paraphrasing

"United States Bankruptcy code law provides for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors."(Bankruptcy LawFirms.com 2004-2005).
-Some US codes allow the people filing stay in business.
-Constitution states thatbankruptcy is a federal issue.
-The states have no control over the laws.
-Special bankruptcy courts have jurisdiction over these issues.
-Chapter 7 is liquidation.
-Chapter 13 is rehabilitation.

"In general, the Reform Act of 1978 made it easier for both businesses and individuals to file a bankruptcy and to reorganize."(Bankruptcy LawFirms.com 2004-2005).

Outline

I. Title- (something relating to bankruptcy)
II. Introduction- one to two paragraphs on what I researched, why, and what I started out knowing.
A. Bankruptcy- what it is and briefly discuss the different types
B. What I knew in the beginning- pretty much nothing other than Delta and a few other companies had recently filed (even a couple times for Delta) and remained to stay open. I did not understand how they could stay opened if they were bankrupt. Which goes into why I choose this tpoic.
C. What I want to find out- Is bankruptcy harder to file for now, or was it easier to do so in the past before all these laws came into affect? (will include my opinion/thesis)
III. History on bankruptcy- two to three paragraphs (big section)
A. Quote on were the term came from
1. "In medieval Italy, when a businessman did not pay his debts, it was the practice to destroy his trading bench. From the Italian for broken bench, "banca rotta," comes the term bankruptcy" (Bankruptcy LawFirms.com 2004- 2005).
B. Give a little background information (see Bankruptcy History/ Citation 6 on blog)
Might set some ground for the legal terms (give some definitions)
C. Start giving some early laws (in my words) and compare them to some more recent statutes. Give opinion of whether or not it made filing more difficult.
D. End the section by giving a little review and giving my opinion on whether or not it is more difficult today to file for bankruptcy.
IV. Discussion- why it is harder or easier by giving at least three examples to back my opinion up. (Includes awsome ending!)

Bankruptcy History/ Citation 6

"Bankruptcy History." Bankruptcy LawFirms.com. 2004-2005. 02 Nov. 2005 http://www.bankruptcylawfirms.com/History-Bankruptcy.cfm.

I found this website that has pretty much an overview of the history of bankruptcy! It is describing where the term bankruptcy comes from. "In medieval Italy, when a businessman did not pay his debts, it was the practice to destroy his trading bench. From the Italian for broken bench, "banca rotta," comes the term bankruptcy" (Bankruptcy LawFirms.com 2004- 2005). Cool, huh?

Before the 20th century, they had ways of dealing with bankruptcy. It was common for the bankrupt person to be charged as a "criminal" (Bankruptcy LawFirms.com 2004- 2005). The creditor most often ended up with the money/ take all the money. It wasn't until the 1800s, in the US, that we started putting in bankruptcy laws in our government.

There is a link on that webpage that has all these dates for laws that were passed. DO I HAVE TO MAKE A WHOLE NEW CITATION THAT IS PRACTICALLY THE SAME SITE JUST FOR A FEW DATES?
This page has a whole lot more, but I think I will put most of that stuff on my next post.

Reflection upon Research

In the beginning, I started my research on marine biology. I wanted to find out what they did on their everyday job. That did not work out. I was doing it so that I could find out about a career I was interested in as well as a research project for school. Kill two birds with one stone. However, I did not like what I found out. So, I changed topics. I am now researching how bankruptcy laws have changed over time, and is it harder to file for bankruptcy now than in the past. I'm not to sure if I have even found the right kind of information! There were some good sites that had stuff on chapter 13 and chapter 7. I just realized that there is a webpage I found(I think) that has all these different dates on laws that went into affect. I think I need to make a time line so you can see the changes throughout history.

I'm not ready to start writing just yet. I need much more notes than what I currently have. So far I like the process because of writing it in a somewhat organized way that is all on "one sheet of paper." But, I am not very good at researching things. That part is slow going for me. It might get better. I'm not sure.

I'd better get started on that timeline!!!

Definitions

LIQUIDATION-To settle a debt, a claim, or an obligation; The selling of assets and the paying of liabilities in anticipation of going out of business
(didn't know it was that simple)

TRUSTEE-a person to whom legal title to property is entrusted to use for another's benefit

CREDITOR-One to whom money or its equivalent is owed

FORECLOSURES-a legal proceeding that bars or extinguishes a mortgagor's equity of redemption in mortgaged real property

NOW I'M READY TO READ SOME BANKRUPTCY STATUTES!!!

I got all this from a website!
http://dictionary.reference.com/

Citation-
Dictionary.com. 2005. 04 Nov. 2005 http://dictionary.reference.com/.

Citation 5

"Bankruptcy Liquidation." Bankruptcy LawFirms.com. 2005. 01 Nov. 2005 http://www.bankruptcylawfirms.com/Bankruptcy-Plan.cfm.

This is a Website that discusses bankruptcy liquidation(whatever that is!). I think what I need to do is find out what all these terms mean. That will be my next blog. Anyways- quote from that webpage...

"There are two basic types of Bankruptcy proceedings. A filing under Chapter 7 is called liquidation. It is the most common type of bankruptcy proceeding. Bankruptcy liquidation involves the appointment of a trustee who collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors.

"Bankruptcy proceedings under Chapters 11, 12, and 13 involves the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors. Under Chapter 7, 12, 13, and some 11 proceedings, a trustee is appointed to supervise the assets of the debtor. A bankruptcy proceeding can either be entered into voluntarily by a debtor or initiated by creditors."

Interesting, huh? What is non-exempt? What is trustee or creditor? Dictionary, anyone? Help!

Bankruptcy Laws/ Citation 3 and 4

New site-
"Learn About Chapter 13." Legal Helpers.com. 2005. Macay & Aleman. 01 Nov. 2005 http://www.legalhelpers.com/legal_helpers/chapter13.html.

"Learn About Chapter 7." Legal Helpers.com. 2005. Macey & Aleman. 01 Nov. 2005 http://www.legalhelpers.com/legal_helpers/chapter7.html.

These are two websites that talk about the different kinds of filings for bankruptcy. One website is for chapter 13, and the other website is for chapter 7 (hence the citations).

From what I understand, you can file for bankruptcy either under chapter 7 or chapter 13. Chaptr 7 states that you can eliminate most unsecured debts. In this kind of whatever it is, in most cases you can keep all of your property. Now, in chapter 13 you "consolidate your debts and make a payment on your debt over a 3 to 5 year period." Ch.13 seems to be more of consolidate your credit debts (I think).

There have resently been some law changes that has made filing for bankruptcy much more stricter. This website go into all the details, but the new law has just made more restrictions.

Law Firm E-mail

I sent this e-mail to a law firm to try to get some help for my paper. Hopefully they will respond.

My name is Katie Harber. I am a ninth grade student at Decatur High School. In my English class, we have been assigned a research project on any topic of our choice. I happen to be interseted in bankruptcy laws. I am required to have a primary source, such as an interview. Would one of your firm's lawyers be willing to either set up an interview date or complete an over the e-mail questionare?

Thank you so much for your time,
Katie Harber

Primary Source for Research Project

For my primary research source I think I'm going to have to find some kind of bankruptcy attorney. Ms. Goode says she has some connections! Lucky me. Hopefully they can at least take the time to answer some questions over e-mail. It would be easier than having to meet with the person! If I can't find an attorney in that specific field, I might have to turn to my aunt. She is a lawyer, but I don't think she does bankruptcy. Oh, well.

Citation 2

Sahadi, Jeanne. "The New Bankruptcy Law and You." CNN Money. 17 October 2005. 26 Oct. 2005 http://money.cnn.com/2005/10/17/pf/debt/bankruptcy_law/.


This is a cnn article that looks good. Has new law on it.

"In a Chapter 13 bankruptcy, you're put on a repayment plan of up to five years. Any debts not addressed by the repayment plan don't have to be paid. Last year, there were 445,574 Chapter 13 filings.

"Under the new law, fewer people will be allowed to file under Chapter 7; more will be forced to file under Chapter 13."

Citation

"Bankruptcy: An Overview." Law About. Legal Information Institute. 26 Oct. 2005 http://www.law.cornell.edu/topics/bankruptcy.html.



This is some kind of legal webpage that looks like it will be good for finding out about bankruptcy.

It looks like I will be able to use the whole website.

Something New

Everyone,
I've changed my mind!! No more marine biology for me. Not worth it. I'm doing my paper on why businesses can go bankrupt yet reopen as something else a month later. Let me know what you think about this issue.