BANKRUPTCY UPDATES

• Minnesota Distillery of Fine Vodkas Files Chapter 7 Bankruptcy (February 10, 2012)
• Court Approves Newspaper Magnate Lee Enterprises’ Bankruptcy Plan (February 07, 2012)
• Suspected Felon Filed for Bankruptcy Shortly Before Untimely Death (February 09, 2012)
• Ireland Overhauls Bankruptcy Laws (February 06, 2012)
• IL State Representative Files for Chapter 13 Bankruptcy (February 08, 2012)

Don't Bet on Gift Cards for a Rainy Day

Maybe you kept all the gift cards you received at the holidays "just in case."

Just in case you didn't have cash, just in case your credit card bills were too high that month, or just in case you needed to give a last minute gift.

Maybe you even participated in a school fundraiser and bought gift cards that way. In your efforts to save money or support a good cause, you thought it was a great idea to stockpile the little cards.

If any of these situations sound familiar, you're not alone!

Gift cards have become wildly popular among people of all ages.

In fact, the National Retail Federation says that roughly $26.3 billion in gift cards were bought by consumers during the 2007 holiday season, with about $75 million still unspent.

Unfortunately, with retailers such as The Sharper Image among those who have recently filed bankruptcy, that gift card in your wallet or purse may now be worthless!

Examining Business and Personal Bankruptcy

Stories about business and personal bankruptcies have become commonplace, especially during the current mortgage crisis.

In February, bankruptcy filings were at their highest levels since the new filing bankruptcy law went in effect in October 2005. But not only are personal bankruptcies at an all-time high, retail bankruptcies and liquidations are expected to reach their highest levels in 17 years, according to a recent article in the Chicago Tribune.

The Automated Access to Court Electronic Records reports nearly 4,000 businesses filed for bankruptcy each business day in February, a full 28% increase over last year and 18% more than this past January.

While bankruptcy filings can be cyclical, there has been a steady upward trend since the beginning of 2006.

Total Bankruptcy reported previously on some such businesses that have had to declare bankruptcy because of growing debts.

And the impact of business bankruptcies is not just felt on the employees who receive pink slips, but also on consumers who "bought stock" in that company by purchasing gift cards that may no longer have any value.

For those holding on to gift cards to spend in the future, caution is advised.

For companies who have filed Chapter 11 bankruptcy, any unspent gift cards are considered loans to the company, and, as in the case of The Sharper Image, these companies often suspend acceptance of gift cards in the process.

So check your wallet.

Check your purse.

And if outdated gift cards are the last straw as you assess your personal financial problems, take action and talk with one of our sponsoring bankruptcy lawyers.

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