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CBS News
an hour ago
- Business
- CBS News
What assets can you lose if you file for bankruptcy?
With interest rates still elevated and stubborn inflation eating away at hard-earned salaries, many Americans are struggling to stay ahead of their bills right now. Credit card debt is also at record highs, payment delinquencies are climbing and more people are falling behind on everything from medical debt to personal loans. For some, the pressure from today's tough economic landscape has caused the financial stress to reach a boiling point, and filing for bankruptcy is starting to look like the only way out. But while bankruptcy can offer a financial reset in the right situation, it also comes with trade-offs that aren't always obvious at first. Yes, it can stop collection calls and lawsuits, but it has a big (and long-term) impact on your credit and finances, and it can be a costly process, too — one involving attorneys, court fees and other surprising expenses. And, there are other things, like certain assets, you might lose in the process. That's why it's important to fully understand the potential repercussions before moving forward. So, what can you lose when you file for bankruptcy? Here's a closer look at what's at stake and what you can do if you're considering this debt relief strategy. Learn more about the debt relief options that could help you avoid bankruptcy here. When most people talk about personal bankruptcy, they're referring to Chapter 7 or Chapter 13 bankruptcy. The type you file plays a huge role in what happens to your property. Chapter 7 is known as the "liquidation" form of bankruptcy, meaning that it wipes out your qualifying debt without the need for repayment. It's typically the faster, cheaper option, but it comes with a tradeoff: The bankruptcy trustee may sell your non-exempt assets to pay off your creditors. Here's what you might lose in the process: That said, many people who file for Chapter 7 don't lose anything at all. Why? Because there are exemption laws that protect certain assets, like modest vehicles, clothing, furniture, tools of the trade and a portion of home equity. Federal and state exemption laws vary, but you often get to choose which set of exemptions applies. If your property falls within the allowed exemptions, it's safe from liquidation. Find out what debt relief options are available to you today. Filing for Chapter 13 bankruptcy works a little differently. Rather than selling off your property to pay creditors, this option reorganizes your debts into a court-supervised repayment plan that typically lasts three to five years. During that time, you'll make monthly payments based on your income, expenses and debts. At the end of the plan, any remaining eligible debts may be discharged. The biggest advantage? You typically get to keep your assets, even those that might not be protected in Chapter 7. This typically makes Chapter 13 a better option for those with high-value property they want to protect. That said, Chapter 13 is generally more complex and expensive than Chapter 7. You'll need enough income to make your plan payments every month, and missing those payments could cause your case to be dismissed. Bankruptcy might not be your only option, and in many cases, it shouldn't be your first. There are other debt relief options that can help you regain control of your finances without putting your assets at risk, including: Offered through credit counseling agencies, debt management plans consolidate your credit card balances into a single monthly payment. The agency also negotiates with your creditors for lower interest rates or waived fees, which can help you save money during the repayment process. You typically pay the full amount you owe, just on better terms, and you usually get to keep all your assets. If you have a decent credit score and stable income, a debt consolidation loan can be a smart way to combine multiple debts into one with a lower interest rate. This option doesn't reduce what you owe, but it can lower your monthly payments and simplify repayment. With debt forgiveness (also referred to as debt settlement), you work with a debt relief company or on your own to negotiate lump-sum settlements for less than what you owe. On average, working with a debt relief company results in settlements that are 30% to 50% less than the full balance, but the process of settling your debt can hurt your credit and lead to collection calls or even lawsuits. However, it might help you avoid bankruptcy and resolve your debts faster. Some creditors, especially credit card issuers and medical providers, offer hardship programs that temporarily reduce or pause your payments due to a qualifying financial hardship. These aren't always advertised, so you may have to call and ask, but they can result in significant, albeit temporary, relief. Bankruptcy can give you a financial clean slate, but it's not without cost. Depending on your situation, you could lose valuable assets like your home, car or savings. That's why it's critical to explore all your options before you file. For many people, debt relief strategies like debt management or consolidation can offer a less drastic and less risky path forward. But if bankruptcy truly is your best option, knowing what's at stake can help you prepare and protect what matters most.
Reuters
an hour ago
- Business
- Reuters
IMF is waiting for more data, agreement on remedial measures on Senegal
LONDON, July 24 (Reuters) - The International Monetary Fund is waiting for some more data before it can firm up its assessment on Senegal's debt situation and still needs to reach an agreement on key remedial measures with the country, a Fund spokesperson said on Thursday. Senegal is grappling with billions in debts hidden by the previous administration - a problem for the cash-strapped country - which has seen its programme with the Fund put on hold over the issue. "Once we have reached agreement on the key corrective measures, the IMF Board will be in a position to consider the Senegal misreporting case and take a decision," a spokesperson for the Fund said in response to emailed questions from Reuters. Based on latest data received from Senegalese authorities, hidden debt is estimated at $11.3 billion at the end of 2023, the spokesperson added. This included a portion for state-owned enterprises of about 7.4% of GDP.
Forbes
3 hours ago
- Business
- Forbes
Forbes Daily: Rising Cocoa Prices Lead Hershey To Raise Candy Prices
Americans are in more debt than ever, but so far, borrowers are holding up fine, Synchrony's financial results show. Inflation threatens to derail that. The financial performance of the Connecticut-based bank offers a window into the health of U.S. consumers, since the firm says one in every four American adults has a Synchrony card—it offers co-branded credit cards and point-of-sale loans for customers like Sam's Club, Lowe's and PayPal. After the pandemic caused a spike in default rates, the bank's CEO Brian Doubles said more customers are now paying back their loans than expected. But while Doubles was optimistic about growth this year, one analyst says the bank's customers are particularly vulnerable to inflation because many have below-average credit Trump Organization has not announced any deals in Abu Dhabi yet, but there have been plenty of signs to suggest it has plans to make a move in the capital of the United Arab Emirates. It's part of a slew of recent overseas Trump projects, all of which represent an about-face for the president, who hung onto ownership of his assets during his first term but stuck them in a trust and promised to launch no new ventures abroad. 'It's gone so far as to be whatever is the direct opposite of government ethics—I suppose we'd call that corruption,' said Walter Shaub, who led the Office of Government Ethics in President Donald Trump's first term before stepping down and speaking out. Columbia University on Wednesday announced that it has agreed to pay $221 million to settle multiple civil rights investigations opened by the Trump Administration, which accused the university of failing to combat antisemitism on campus. The university said the agreement 'preserves Columbia's autonomy and authority over faculty hiring, admissions, and academic decision-making,' while President Trump praised the university for 'agreeing to do what is right.' Photo by Beata Zawrzel/NurPhoto via Getty Images Tesla reported its worst revenue decline in more than a decade Wednesday, as Elon Musk's political activities continue to weigh on the company's bottom line. The EV maker attributed the downturn to a 13% decline in vehicle deliveries in the second quarter and less cash from selling regulatory credits, though analysts have expressed some optimism after the company's limited robotaxi rollout in Austin, Texas. It was harder to sell a small business last quarter, data from online marketplace BizBuySell shows, as buyers were cautious about higher interest rates, tougher loan rules and overall economic stability. The median sale price also fell by 6% on a year-over-year basis, but some sectors were more impacted than others: Service-oriented businesses like healthcare and construction continue to attract buyers, while manufacturing took a sharp hit. Record high home prices and elevated mortgage rates are tamping down real estate demand, as sales of existing homes fell 2.7% in June, according to data from the National Association of Realtors. The median existing-home price reached an all-time high of $435,000, and NAR Chief Economist Lawrence Yun said years of undersupply are driving the record prices. TECH + INNOVATION Vanta cofounder and CEO Christina Cacioppo Katie Thompson Security and compliance software company Vanta said Wednesday it raised $150 million, valuing the startup at $4.15 billion. The firm, cofounded by CEO Christina Cacioppo, who is on Forbes' list of America's Richest Self-Made Women, seeks to automate businesses' security compliance processes, through both continuous monitoring and real-time reports with the help of AI. Google parent company Alphabet exceeded expectations for its second-quarter earnings, spurred by its cloud and search business, though shares remain relatively flat for the year. Experts have mixed expectations for the company's stock ahead of a looming antitrust ruling that could force a sale of its Chrome browser. MONEY + POLITICS U.S. Attorney General Pam Bondi Photo byIn the latest update to a quickly escalating crisis for the White House, the Wall Street Journal reported that Attorney General Pam Bondi told President Donald Trump he was named multiple times in the Epstein files at a routine briefing in May. Officials reportedly told Trump the files contained rumors about him and other high-profile figures who socialized with Epstein in the past. Trump had a long association with the disgraced financier before Epstein pleaded guilty to sex crimes in 2008. In a 2-1 ruling, the 9th U.S. Circuit Court of Appeals upheld a lower court ruling that blocked President Donald Trump's order seeking to end birthright citizenship, deeming it unconstitutional. In its majority opinion, the court said that the executive order 'contradicts the plain language of the Fourteenth Amendment's grant of citizenship to 'all persons born in the United States.'' Wednesday's ruling will likely set up a future hearing by the Supreme Court. TRENDS + EXPLAINERS President Donald Trump's battle with universities has focused on elite private schools, but the impacts on higher education as a whole have been sweeping: In the first six months of the Trump Administration, federal agencies—primarily the National Institutes of Health and the National Science Foundation—canceled more than 4,000 grant awards worth an estimated $7 billion at over 600 colleges and universities. Among the 10 states that have lost the most funding per student, four are red and six are blue, a new report from the left-leaning think tank Center for American Progress shows. DAILY COVER STORY Former Citigroup Chair Sandy Weill's New $100 Million Gift To Harness AI For A West Coast Cancer Hub Philanthropists Joan and Sandy Weill Walter Zarnowitz/UCSF Sanford 'Sandy' Weill, the former CEO and chairman of banking giant Citigroup, and his wife Joan have been big donors to medical research on both coasts of the U.S. Now, the couple are taking it up a notch. On Wednesday, two Bay Area universities—University of California, San Francisco and Stanford University—announced a $100 million gift over 10 years from the Weill Family Foundation for a new cancer hub that is designed to advance cancer research and treatment via four specific projects. The gift, a matching grant, has the goal of raising an additional $100 million for the new initiative, called the Weill Cancer Hub West. A quarter of the matching funds have already been raised, the universities said. Sandy Weill, who retired as Citigroup CEO in 2003 and as chairman in 2006 and dropped off Forbes' billionaires list in 2022 as a result of his charitable giving, is now 92 years old and devoting most of his time to philanthropy via he and Joan's $425 million (assets) charitable foundation. Though the death rate from cancer has fallen by about a third in the past quarter century, cancer is still on the rise, with almost 20 million new cases annually and about 10 million deaths globally each year. The Weill Cancer Hub West will harness recent promising developments to tackle cancer. One project will use the gene editing tool CRISPR to engineer immune cells inside the body by injecting the CRISPR machinery into a patient, deliver it to a patient's immune cells, and reprogram those cells to go after the cancer. Another project, in the area of cellular therapy, aims to build weaponized cells that are personalized to each patient to go after solid tumors—like breast cancer or pancreatic cancer. WHY IT MATTERS 'This donation comes at a time when funding for more than 1,000 grants from the National Institutes of Health has reported to have been cut off and a debate continues on dramatically reducing their budget,' says Forbes assistant managing editor Kerry Dolan. 'Though extraordinary progress in cancer treatment has been made in recent decades, there's still much to accomplish. Plus, private funding like the grant from the Weills' foundation enables the two universities to take more risk than they would likely be able to with government funding.' MORE How This New Biotech Billionaire Outmaneuvered Merck In China FACTS + COMMENTS Prices on a number of Hershey's candy products will soon increase due to a surge in cocoa prices. The iconic American chocolate company will also adjust each container's weight and quantity: From the low teens to 20%: The size of the price hikes, which will vary 90 days: The amount of time it typically takes higher prices to materialize at retailers, according to a spokesperson $15 million to $20 million: The hit Hershey expects to take from President Donald Trump's wide-ranging tariff policies this year STRATEGY + SUCCESS Modern society places an emphasis on perseverance, but sometimes it's better to know when to walk away. Don't stick with something just because you invested time and money into it—if you spend time on something, it takes away from doing something else that you may be more passionate about. Quitting may be another path to self-improvement. VIDEO QUIZ An upcoming film from Amazon MGM Studios will feature portrayals of several billionaires. Who is actor Ike Barinholtz in talks to play in the comedy-drama Artificial ? A. Bill Gates B. Sam Altman C. Jeff Bezos D. Elon Musk Check your answer. Thanks for reading! This edition of Forbes Daily was edited by Sarah Whitmire and Chris Dobstaff.
Bloomberg
5 hours ago
- Business
- Bloomberg
Torrent Is Said in Talks to Buy L&T's Power Unit for $1 Billion
Torrent Power Ltd. is in talks to buy the thermal business unit of Larsen & Toubro Ltd. for about $1 billion including debt, according to people with knowledge of the matter. Both companies are working with advisers on the potential transaction, the people said, asking not to be identified because the deliberations are private. A disposal would help L&T raise cash to reduce its debt, the people said.
Reuters
5 hours ago
- Business
- Reuters
Explainer: Senegal's billions in hidden debt, and why it is an IMF headache
DAKAR/LONDON, July 24 (Reuters) - Senegal is grappling with billions of dollars in debt that was hidden by the previous administration - a problem for the cash-strapped country whose Prime Minister Ousmane Sonko is expected to present a comprehensive economic recovery plan next week. The issue has also raised questions for the International Monetary Fund, which at the time had been monitoring Senegal's finances under a loan programme. What is the debt, why have the figures changed and what is next for Senegal and the IMF? In September 2024, Senegal said an audit of government finances, which had been ordered by newly elected President Bassirou Diomaye Faye, put the end-2023 budget deficit at over 10%, significantly wider than the 5% reported by the previous administration. Faye's government ordered a further audit, and the IMF froze Senegal's three-year, $1.8 billion credit facility, which had been agreed in June 2023. Since then, Senegalese authorities have worked to determine the full scale of the debt and keep the government running in the face of curtailed resources and a lack of access to IMF funds or international bond markets. It is unclear how the off-books borrowing was spent. Current Prime Minister Sonko has accused the previous government of corruption, and there are some ongoing court cases related to alleged theft of COVID-19 funds. A Court of Auditors review in February calculated that overall debt at the end of 2023 was equivalent to 99.7% of Senegal's gross domestic product, well above the previous figure of 74.41%. That new total implied hidden borrowing of around $7 billion. But in June, provisional figures put central government debt of around 23.2 trillion CFA francs ($41.73 billion) by end-2024, a more than 27% increase from end-2023. This translates to a 119% debt-to-GDP ratio, according to Barclay's economist Michael Kafe, who said on June 30 that the new figure presented "new risks to the debt trajectory and likely complicates on-going talks with the IMF." S&P Global Ratings, in its downgrade of Senegal's credit rating this month, pegged hidden debts at around $13 billion and the ratio at 118%. This would make Senegal one of the most indebted countries in Africa, placing it in a small, unenviable club alongside Zambia, Cape Verde and Sudan. Senegal is not the first case of hidden debt. Mozambique's infamous "tuna bond" scandal is the most recent high-profile example in Africa. But at roughly $3 billion, Mozambique's secret debt is dwarfed by Senegal's. The IMF, which has come under fire for not catching the off-books lending, did not comment when contacted by Reuters, but it has previously said it will review what happened once it has all the information. In the meantime, the IMF's executive board must approve either a waiver for misreporting or order Senegal to pay back previous programme disbursements. With a waiver, Senegal can negotiate a new programme. Few expect the IMF to order Senegal to repay, which would effectively punish the current government's transparency. But negotiations have taken longer than expected. Senegal had hoped for a new programme by June. The IMF said a decision on the waiver was unlikely before June or July. In a June 14 statement, the government said it had shared all the results from its "reconciliation exercise" with the IMF. Sources expect action on a waiver in September, though the IMF could discuss Senegal earlier. An IMF spokesperson said the board would consider the data misreporting "in due course". Prime Minister Sonko has said next week's economic recovery plan will "tell the Senegalese how to get the country back on its feet, point by point." A new IMF programme would help them finance that plan, but crucially would also give foreign investors confidence to lend again. To get one, however, Senegal must demonstrate how it will return to debt sustainability. Senegal's bonds rallied earlier this month after it said it would rebase its economy for the first time since 2018, which some investors say could push its debt-to-GDP back down into double digits, a potentially more palatable level for the IMF. The government could also attempt to reprofile debt by pushing payments further into the future but is expected to avoid a full restructuring. Senegal - due to its membership in the West African currency union UEMOA - does not have a problem sourcing the hard currency it needs to repay loans. And a restructuring could destabilise some regional banks holding its debt, which would be bad for the region. ($1 = 557.7500 CFA francs)
