Orantes Law Firm
Hope yet for Rhythm & Hues as potential buyer places bid
About a month ago, we discussed the Chapter 11 filing of the special effects company Rhythm & Hues. The company is one of the most renowned special effects companies in the world (they worked on the movie “Life of Pi,” which won the Academy Award for Best Visual Effects), but has faced a declining financial landscape for awhile now. Foreign competition in the visual effects industry has left many visual effects firms thinking about bankruptcy.
Businesses are always going to be under financial pressure, and in many cases, this can result in a company going under. Many small businesses fail because of a lack of finances. The owner may pour in massive amounts of time and money into the company to get it off the ground — but ultimately, that does not mean the company will succeed.
Filing for Chapter 13 takes a lot of steps, and one of those steps is to get approval from a judge. If they approve your debt reorganization plans under the Chapter 13 filing, then a trustee will be appointed to your case to ensure you stay on track with your payments and that your financial situation remains in line with what the judge and your creditors expect.
Is filing a Chapter 7 or Chapter 13 filing ideal? Of course not. It has its consequences, and the filer will have to deal with them for many years to come. For example, since a bankruptcy filing will immediately impact your credit score, it can be difficult to secure a loan in the aftermath of bankruptcy.
However, the alternative is even worse. An individual could fall so deep into debt that they face criminal charges for, say, evasion. Or the debt can become so overwhelming that an individual is basically forced to file for bankruptcy — and at that point, it can be “too late,” so to speak. What we mean by that is, you may lose more if you file a “late” bankruptcy filing as opposed to being proactive, accepting the negative side-effects of a bankruptcy and just going through with the filing at an early stage to get your financial situation under control.
One of the most famous visual effects companies in the entertainment industry has fallen on hard times. After laying off 200 employees, Rhythm & Hues — which did work for the film “Life of Pi,” which is up for an Oscar for best visual effects — has taken another step towards securing its financial livelihood by filing for bankruptcy protection. Rhythm & Hues is not the only visual effects company to struggle. In fact, numerous such companies have either disappeared or sought bankruptcy protection.
Continuing the Chapter 11 theme from our last post, the American Bankruptcy Institute recently released a report that says Chapter 11 bankruptcies filed by businesses plummeted over the last year. In Jan. 2012, there were 749 such Chapter 11 bankruptcies — whereas this January, there were only 479. That represents a remarkable 36 percent drop.
Individuals in Los Angeles are not the only victims of outstanding debt. Many businesses in the area, and all around the country, struggle to stay afloat after taking out loans — and the smaller that business is, the more difficult it can be to get out of the red. Even with the seemingly impossible task of paying the debt back looming over a business, the owners of the company should not panic. There are ways to manage your debt in a way that allows the company to survive, move on and even thrive.
Los Angeles residents are well aware that the economy is still in an uncertain period, despite recent signs that things may be turning around. For every bit of good news regarding increased job creation and decreasing unemployment rates, there is a fiscal cliff or debt ceiling debate that sends the stock markets tumbling, placing financial strain on hard-working people all across the country.
As we have outlined before — and as many media outlets have noted — college students are struggling to handle their debt. It’s not entirely their fault, mind you. Rising tuition rates and a tough job market make it very difficult for a graduating student to pay off their loan debt. Declaring for bankruptcy can help these graduates, allowing them to clear other debts to give them some financial breathing room, which can be used to focus on paying off their student loan debt.
It is a moment that every in-debt person fears: your cellphone rings and the number is unrecognizable. What’s the most likely reason for the call? Sure, it could be a distant family member — or maybe the job offer you have always wanted is just on the other end of the line. But the reason you are receiving this call is almost certainly because a debt collector is trying to garner the funds you owe.