Omaha Bankruptcy Law Blog

Many in the business world already know that alternative dispute resolution methods such as mediation and arbitration can save money and time. Meditation is now being hailed as a way to save or mitigate many of the predicted 10 million foreclosures in the United States over the next few years.

In Nebraska, lenders recover unpaid debt through a non-judicial foreclosure sale. Homeowners typically get a notice of sale date if the lender is planning to pursue this process. However, mediation would allow homeowners and lenders to discuss resolutions besides the sale, which could result in a better outcome for both parties.

The downtown Lincoln Marriot changed hands after the owner defaulted on a $3.5 million loan. The Cornhusker has been a leading hotel in Lincoln for many years, but increasing financial woes for the owner has lead to complications with his lender as well as his relationship with Marriot.

The foreclosure sale was held last week, not long after the owner learned that the franchise agreement with Marriot would be terminated. He has also filed for bankruptcy for one of his companies in Florida.

Most people in Omaha would agree that foster parents deserve our respect, support and admiration. These people take children into their homes because they have a sense or moral obligation or because they are good people -- they certainly do not do it for the money.

Unfortunately, foster parents do not earn much for their efforts, and in some cases they make so little that their household budget is stretched to the point where bankruptcy needs to be considered.

Bankruptcy filings were down in Nebraska last year, but there seems to be dispute over just why that happened and whether it is the start of a long-running trend.

There were 6,603 bankruptcy filings in Nebraska during 2011. That compares to 7,949 filings in 2010. That amounts to a 17 percent drop.

Nationwide, bankruptcy filings fell 12 percent.

People here in Omaha know the medical care is expensive. They also know that credit card debt can quickly mount in no time at all. Hopefully, they have not had to learn these lessons the hard way, but if a new report is any indication, an increasing number of Americans are being put into a position to do just that and may need to resort to bankruptcy as a result.

The report found that first, more Americans are having trouble paying medical bills because the cost of care is going up, as is the price of health insurance. That may not exactly be news, since we have heard that before. But its second finding is more alarming - it seems that more and more people are resorting to credit cards to pay these bills.

In December, we reported on the evolution of the Nebraska Book Company bankruptcy. The Lincoln-based company, which filed for Chapter 11 protection last June, has recently announced that as a part of its reorganization plan, it will close seven bookstores across the country. The stores will operate for about a month into the semester to capture additional revenue, then shut down. The Nebraska Bookstore will remain open, however.

The progression of the Nebraska Book bankruptcy highlights the benefits and purpose of the bankruptcy system. Nebraska Book filed for Chapter 11, which is designed to help businesses that cannot pay their debts. The aim is to restructure businesses and their debt obligations so that they can emerge stronger, leaner and more competitive. Part of the Chapter 11 process gives a business the ability to reject some contracts, including leases, if certain conditions are met. This ability allowed Nebraska Book to trim costs by closing seven stores.

Ever since it became clear just how bad the mortgage and foreclosure crisis was going to be, state and federal officials have been working to see what they could do to help distressed homeowners. Now, federal officials, states attorneys general and some of the country's biggest mortgage providers have reached a deal that could help some homeowners in Omaha who have been foreclosed upon.

Under the deal, about 1 million homeowners could have their mortgages reduced by as much as $20,000. The deal has not been officially announced, so details are still under wraps, but it seems this money would come from settlements with Bank of America, J.P. Morgan Chase, Citigroup, Ally Bank and Wells Fargo Financial.

Many people in Omaha probably liked the Cameron Crowe movie "Jerry Maguire." This 1996 drama, which starred Tom Cruise as a money-obsessed sports agent who realizes he needs other priorities in life, gave rise to Renee Zellweger's famous line "You had me at hello" and went on to earn more than $150 million at the box office.

It may be of interest, then, to note that the real-life sports agent who inspired the tale recently filed for Chapter 7 bankruptcy. He has said he owes more than $1.4 million and has no assets other than some stock.