I'll try to make this short and to the point, but please bear with me (I'm stupid).

Some of you might remember I made a thread not too long ago about some general contractor issues I was having. These have largely been resolved and I recovered about 2/3 of my money. In hindsight it was always a pretty small amount anyway, but it was important to be regardless (principle).

Anyway, I got a notice in the mail about the contractor's bankruptcy case (surprise). Holy shit, this guy was really in over his head. When you see how much money he took from other people it's just absolutely staggering. Also, when you see how much stuff he has and stands to lose, it's hilarious and comforting.

So in nice round numbers he owes about $1.1 million to creditors with secured claims. He owes about $400k in unsecured claims, and he has about $900k in assets not claimed as exempt.

Part of the terms it appears (besides surrendering all that property) is the fact he has to pay about $1100/mo for 5 years (I assume to the bankruptcy court)? I assume as well they base that off his current income which is quite small anyway.

My little piece of this pie is so small as to be unimportant, but some of these unsecured claims are big (like $90k literally stolen from a little old lady). Are these people truly fucked? I'm not really sure I understand this whole process, but it seems to me he's getting off pretty god damn light.

11/20/2012 10:23:21 AM

The old lady isn't necessarily screwed, but it's likely she'll be the last one paid.

11/20/2012 10:40:48 AM

http://www.wral.com/5onyourside/story/11310360/

11/25/2012 11:20:41 AM

all secured creditors get paid first. usually in bankruptcies, unsecured creditors get fucked. that's what will happen here, given that he only has enough in assets to pay some of the debts to secured creditors.

that's why being a secured party is good, and having priority on collateral is awesome. being an unsecured party is not good.

the end result is the old lady will get nothing.

(your real issue is with limited liability, not the bankruptcy process...but it's good in a way, because without limited liability, people wouldn't take risks, which is what our system is predicated on.)

[Edited on November 26, 2012 at 12:24 AM. Reason : dsf]

11/26/2012 12:21:29 AM

Deduct this shit on your taxes is probably the only other thing to do then ey?

It's unfortunate reading through the documents... At first you're only scanning for yourself and then you see some of the numbers regarding others.

Great Christmas present for them

11/26/2012 10:57:36 AM