Student debt solution? Allow bankruptcy

One of the great financial burdens today is student debt. Gigantic tuition hikes over the last few decades have saddled college graduates with insurmountable debt that can’t be relieved by bankruptcy.

In 1978, the bankruptcy laws were overhauled and the ability to discharge studennt loans was taken away. The reasoning was tuitions were much lower and there was a robust job market and most graduates had no problems getting jobs.

Fast forward 30 year and tuitions have skyrocketed and graduates have no avenue to climb out from under the debt even if they are gainfully employed.

The ability to declare bankruptcy as a last resort has long been a vital element of American society yet that is denied to young people who need to borrow for their education.

Back when the law was changed, student loan defaults were not an issue. Now due to the high cost of college, defaults are common and a change in the law is needed.

Last year U.S. News and World Report released study saying total student debt now tops $1.3 trillion. It’s the single fastest-growing segment of U.S. consumer debt, increasing by 170 percent over the past ten years. 44 million Americans currently have student debt, and 8 million of those have already defaulted on their loans.

We define that as a crisis.


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Retailer Gymboree emerges from bankruptcy ashes

Gymboree, the kids clothing maker, managed to achieve a rare move in the world of retail bankruptcy. It was able to restructure successfully. Bloomberg reported that the company will be  unveiling a rebranded apparel line and an increased tech push in an effort to appeal to the modern parent.

Bloomberg  quotes CEO Daniel Griesemer, who took over in May 2001, “We have spent the past nine to 10 months positioning the company, and the Gymboree brand in particular, for a turnaround. So nationwide, all new products, new brand positioning, new look and feel. Essentially, an all-new Gymboree.”

The company rolled out its new offerings last week which include more basic staples to allow better mixing and matching in an attempt to go up against fast-fashion  retailers who have snagged a bigger share of the youth market.

Griesemer said, “The modern parent learned to shop at Forever 21 and H&M and Zara” and that Gymboree’s line seemed “dated.”

In the next month approximately 75% of their stores will feature the new line and the old inventory will be sold as discounted clearance.

Gymboree will also open 12 new Janie and Jack stores across the country. These stores are a   higher-end clothing line which Griesemer said “has significant room to grow” and will see a “broadening product line.” There are also plans to open “a couple” of new Crazy 8 stores, an  affiliated brand.

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2 Arizona hospitals file bankruptcy

Gilbert (Ariz.) Hospital and Florence (Ariz.) Hospital entered Chapter 11 bankruptcy in May  after creditors tried to force the hospitals into bankruptcy to try  and recoup $1.96 million they claim the affiliated hospitals owe.

In April, three employees of Florence filed an involuntary bankruptcy petition for $46, 650 in wages and the Gilbert involuntary petition was filed by the founder and CMO Dr. Timothy Johns, an unsecured creditors’ trust and a Phoenix law firm. Involuntary bankruptcies are used by creditors when they don’t believe they will be paid for goods or services they provided.

In court documents filed May 1st, creditors claimed the two Arizona hospitals failed to make lease payments for months and both facilities are “on the brink of complete shutdown.”

After creditors ask a court to initiate bankruptcy proceedings, the debtor(s) have the chance to contest the petition. The two Arizona hospitals failed to meet the 21-day timeline and the court granted the creditors’ request for relief through the Chapter 11 bankruptcy process.

This is the second time the two hospitals have been in bankruptcy court. The hospitals filed for voluntary Chapter 11 bankruptcy in 2014.


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Gibson Guitars files for bankruptcy

After over 100 years of being in the mucil instrument business, famed Gibson Guitars has filed fo bankruptcy.

The company filed for bankruptcy protection in Delaware, an action many have for some time. The company owes as much as $500 million and that debt has burdened it over the years. According to Bloomberg News, a $135 million loan should help keep Gibson in business after its debt is restructured. The report also states that several dozen companies were contacted about a purchase, but no deal was finalized in time.

Gibson has been in the music business since 1894, and throughout that time has sold millions of guitars to some of the greatest artists who have ever recorded music, like Elvis Presley. The company still sells over 150,000 units every year, and through the decades has diversified and moved into other areas of the music industry. The guitar giant also owns a dozen other brands like Epiphone, Steinberger and Kramer. it sells audio equipment such as amplifiers, tuners an headphones

.According to a number of experts, its this diversification is one of the reasons Gibson is in financial trouble is because it tried to expand and diversify and make the company more of a lifestyle brand, instead of just a guitar seller.

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Cancer increases bankruptcy risk, even if you have insurance

A new study by the Hutchinson Institute for Cancer Outcomes Research in Seattle has found that even though the may have insurance, those suffering from cancer may face bankruptcy .

According to the lead researcher, Scott Ramsey, M.D., Ph.D.

Bankruptcy may represent a unique and heretofore unstudied potential source of health disparity.  In this study, we formed a novel partnership with the Federal Bankruptcy Court and the National Cancer Institute’s SEER cancer registry to link bankruptcy records for cancer patients and a matched control population without cancer.  Our findings indicate that  that cancer patients experience excess rates of bankruptcy compared to persons without cancer, results that have potentially important implications for those researching the causes of cancer disparity, and for policymakers seeking to mitigate the economic as well as clinical burden of persons with cancer.

The researchers found that out of 197,840 people with cancer, 4,408 of those diagnosed between 1995 and 2009 filed for bankruptcy, compared to 2,291 of those without cancer.

Read more at 

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