On July 22, 2013, Mi Pueblo filed for bankruptcy protection under Chapter 11 of the United States Code in the Northern District of California, San Jose Division (case no. 13-53893). The Honorable Arthur Weissbrodt is the presiding judge.
The story of Mi Pueblo is similar to many individuals that we meet in our law firm. In the case of Mi Pueblo, Wells Fargo was a catalyst to the grocery chains need to file bankruptcy. Mi Pueblo had most of its cash in Wells Fargo accounts, and used loans from Wells Fargo to keep the day to day operations of the grocery store going. Wells Fargo attempted to change the terms of the loans with Mi Pueblo after becoming concerned about Mi Pueblo's debt to income ratio. (San Jose Mercury News).
Lenders do the same thing to individuals. Lenders will increase interest rates, reduce the available balances and hit consumers with penalties and other fees. This can cause a snowball effect that eventually leads an individual to feel the need to turn to bankruptcy protection for the fresh start that it can provide.
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