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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.
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
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.