The former CEO of New Century Bank, shut down by the government in 2010, along with 6 other Illinois banks, has filed for personal bankruptcy. The woman is seeking debt relief from debt listed in the bankruptcy filing between $1 to $10 million. She has filed Chapter 11 bankruptcy to allow her to restructure her debt. The list of creditors in the bankruptcy filing includes family friends, businesses and $13,000 in Cook County property taxes. The woman remains a prominent figure in the banking industry. The bank she led as CEO, New Century, suffered from overwhelming bad real estate loans.
For those seeking debt relief and a fresh start, Chapter 11 bankruptcy is possible for consumers (though, generally, in rare circumstances). Commonly considered a business reorganization bankruptcy, Chapter 11 for individual consumers seeking to eliminate debt is usually sought by those who still have substantial income potential, but whose debt exceeds the limits for typical consumer bankruptcies, including Chapter 7 or Chapter 13 bankruptcy. Chapter 11 bankruptcy is sometimes considered more filer-friendly because the court has the ability to push through a reorganization repayment plan over objections from creditors.
Other types of consumer bankruptcy more commonly used by individuals to help eliminate date include Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy is considered a liquidation bankruptcy, during which non-exempt assets are liquidated to repay creditors. Chapter 13 bankruptcy allows filers, who have reliable income, to restructure debt into a manageable repayment plan to help repay and eliminate debt in 3-5 years.
Filing for bankruptcy can provide a fresh start to all types of consumers facing financial challenges. Many options exist to help consumers eliminate debt.
Source: Crain’s Chicago Business, “Former bank CEO files for bankruptcy,” Shia Kapos, Jan. 28, 2013.
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Former Illinois bank CEO files for bankruptcy