What you can learn from the Chicago Cubs
bankruptcy
Even though they were well out of the playoffs, the Chicago
Cubs made headlines this week as one of the most popular Major League Baseball
teams officially filed bankruptcy.
The move was expected, pre-planned and lasted only one day,
but by examining the reasons why the ballclub decided to file just before
officially coming under new ownership can shed some light on why many people
turn to bankruptcy for debt relief.
Resolution with creditors
The Chicago Cubs and their landmark ballpark Wrigley Field
had been owned by The Tribune Company for the past several decades. The Tribune
Company also operates newspapers like The Chicago Tribune and Los Angeles Times
as well as TV station WGN.
The Tribune Co. filed for bankruptcy in late 2008 shortly
after being purchased by Sam Zell. Zell planned to sell the Chicago Cubs and
Wrigley and thus kept them out of the initial bankruptcy filings.
So now, after months of negotiation, the sale of the Cubs to
the Ricketts family is complete. But before the sale was 100 percent finalized,
the Rickets family wanted to set up and enter, for one day, Chapter 11
bankruptcy.
Chapter 11 bankruptcy is almost solely used for businesses,
but the protection that the new owners got from this type of bankruptcy is
generally the same type of protection that is offered to anyone successfully filing bankruptcy.
Bankruptcy is designed to offer a final binding and lasting
resolution of your debts. Once a debt is resolved through bankruptcy your
creditors may not continue to harass you for payment. Reportedly, the new Cubs
owners didn’t want creditors coming after them for the previous owner’s debts,
so they put the club through bankruptcy.
Similarly, all of the debts you include in your bankruptcy filing should be
permanently settled if you successfully meet all the requirements of your case.
Protection of Assets
The Cubs sale includes some valuable property, particularly
famed Wrigley Field. The second oldest ball park in the MLB, Wrigley Field is a
historic landmark and destination for baseball fans across the country. The new
owners likely also want to protect this valuable icon from old debts during the
sale. Personal bankruptcy cases may also offer property protection in two
forms.
First, the automatic stay, which kicks in when you file bankruptcy, should put
an immediate halt to foreclosure and repossession efforts, and this may allow
you to keep your stuff and stay in your home.
Second, all types of personal bankruptcy have some concessions for permanent
home protection. Chapter 7 exemptions or Chapter 13’s debt resolution may be
used to help you end all claims against your property.
Fresh Start
The Cubs’ new owners can benefit in the same way as so many
people who successfully file bankruptcy. They can work towards a fresh, clean
start.
Because of bankruptcy was designed to eliminate debt, many
people see it as an opportunity for a fresh start. With the ghosts of bad
interest rates, old habits and tough times effectively gone, the time after
bankruptcy may be one where you are back in control of your life. Without the constant
calls of creditors, just think of the stress that may be lifted off your
shoulders.
A fresh start can be a benefit for anyone, whether you’re
struggling to keep up with your debt or trying to get back to the World Series.
Trevor Higgins is a writer and blogger at
TotalBankruptcy.com, a site that helps people learn more about filing bankruptcy.