Harbinger Takes Aim At $1.7B LightSquared Debt Guaranty




By Andrew Scurria

Law360, New York (October 27, 2014, 5:38 PM ET) — Harbinger Capital Partners LLC can expect a decision later this week on its attempt to wipe out a $1.7 billion guaranty claim asserted by a group of secured lenders against the smaller half of LightSquared Inc., the judge handling the gnarled Chapter 11 case said Monday.

Philip Falcones hedge fund, which holds a controlling position in LightSquareds equity, has offered up a Chapter 11 plan that would reorganize the debtors parent entity LightSquared Inc. separately from the LightSquared LP unit where most of its valuable wireless…

Six years after Lehman’s crash, US and UK play out next financial crisis

The top financial brass from the Treasuries and central banks of Britain and the US are to take part in a war game, behind closed doors in Washington on Monday, to test how they would handle another Lehman Brothers-style banking crisis .

Six years after the financial earthquake that led to the multibillion-pound taxpayer bailouts of Royal Bank of Scotland and Lloyds Banking Group, the most senior policymakers from both sides of the Atlantic will try to find out whether they are now any better prepared for the collapse of a bank deemed too big to fail.

The chancellor, George Osborne, and Mark Carney, the governor of the Bank of England, will stay on at the end of the annual meetings of the International Monetary Fund and World Bank to head the UK team in the exercise, which is to be held at the offices of the Federal Deposit Insurance Commission – the organisation that guarantees US bank deposits.

They will be joined by 11 others, including the chairman of the Federal Reserve, Janet Yellen, the US treasury secretary, Jack Lew, and regulators from Britain and America, for a test of how the authorities would respond to two possible scenarios – the collapse of an American bank with UK operations and the failure of a British bank with operations in the US.

Although the war game will not be based on any specific institution, UK banks with operations in the US include Barclays and HSBC, while US investment banks such as Goldman Sachs and Bank of America have a big presence in the City.

Osborne said it was the first time a war game had been conducted at such a senior level. “We will work through how we would respond to the failure of a cross-border firm. We are going to make sure we could handle an institution previously regarded as too big to fail,” he said.

The decision by the US authorities to let Lehman collapse in September 2008 set off a chain reaction in financial markets that was only halted when governments around the world stepped in with taxpayers’ cash to recapitalise banks seen as at risk.

Monday’s game will involve the collapse of a single bank rather than the sort of systemic failure threatened in 2008. But Osborne said lessons had been learned from 2008, with policymakers now having options they lacked then.

The chancellor said he needed to be sure the government was better prepared for “what’s thrown at us and better prepared to protect taxpayers than the previous administration in the UK was”.

The last Labour government pumped more than pound;65bn into RBS and Lloyds in October 2008 but Osborne said “enormous progress” had been making on tackling the too-big-to-fail problem since then.

The war game is designed to stress-test the new domestic and global rules for regulating and supervising banks devised since 2008.

In the UK, the government has handed new watchdog powers to the City, ring-fenced the retail operations of banks from their investment arms and forced banks to hold more capital. At the global level, the Financial Stability Board, chaired by Carney, has been seeking to ensure financial regulation is consistent across borders.

Osborne said: “In 2008, the judgment of my predecessor and others was that banks like RBS were too big to fail. I want to make sure that either myself or my successors in this job would have real options and would avoid bailing in the taxpayer. I’m pretty confident that is the case.”

The chancellor said Monday’s event would try to pack into a morning a crisis that would unfold over several days.

“No war game is like war itself,” Osborne said. “But it means we will be far better prepared. I’m sure this is not the last time this will happen.”Monday’s war game will take place after the annual meeting of the International Monetary Fund in Washington in which the risk of a fresh recession in the euro zone has been a dominant theme.

Osborne said the problems of the euro zone posed “the biggest threat to the world and UK economies” and admitted that Britain was “not immune” to the deteriorating outlook for its biggest trading partner.

“This is a critical moment for the British economy and the world economy”, the chancellor said. “Serious clouds are gathering on the horizon”.

Osborne made it clear that he expected UK growth to slow as a result of its exposure to the euro zone. “There are risks to Britain’s growth from the euro zone and we are seeing some of them materialise”, he said.

The chancellor said that the euro zone finance ministers and central bank governors knew they were “under the microscope” in Washington. “They know they have some questions to answer.”

Implant Sciences to Sponsor Session on the Future of Aviation Security at …

WILMINGTON, Mass., Oct. 27, 2014 /PRNewswire/ — Implant Sciences Corporation (OTCQB: IMSC), a high technology supplier of systems and sensors for homeland security and defense markets, today announced its participation in the 23rd Annual AVSEC World 2014 Conference on October 27 29, 2014 in Washington DC The Company will exhibit its QS-B220 explosives trace detector (ETD) at booth #17. The QS-B220 is the only ETD in the world that has been placed on the US Transportation Security Administrations (TSA) Qualified Product List and passed the Common Evaluation Process (CEP) defined by the 44 member nation European Civil Aviation Conference (ECAC).

Dr. Bill McGann, COO of Implant Sciences, will be speaking on the Emerging Threats panel during the morning of October 28th. Furthermore, Implant Sciences is the sponsor of AVSECs plenary session on October 27, titled Creating the Future: Meeting the Demands of the Future; Raising the Bar for Aviation Security; Managing the Message; Aligning Aviation Security and Facilitation.

AVSEC World 2014 will focus on creating a sustainable Aviation and Border Security System. It will look at the need for greater flexibility in regulation, recognition of measures between countries and the alignment of border and aviation security an imperative for the future. AVSEC World provides attendees with the opportunity to connect with top-level executives and experts from airlines, governments, manufacturers and suppliers, all working together for the future of aviation security. AVSEC is sponsored by The International Air Transport Association (IATA), the global trade association for the airline industry with 240 member airlines that comprise 84% of total air traffic.

About Implant Sciences

Implant Sciences is a leader in developing and manufacturing advanced detection capabilities to counter and eliminate the ever-evolving threats from explosives and drugs. The Companys team of dedicated trace detection experts has developed proprietary technologies used in its commercial products, thousands of which have been sold across more than 50 countries worldwide. Implant Sciences is only the third manufacturer, and the sole American-owned company, to currently have an ETD system named as a Qualified Product by the US Transportation Security Administration. The Companys ETDs have received approvals and certifications from several international regulatory agencies including the TSA in the US, ECAC in Europe, STAC in France, the German Ministry of the Interior, and the Ministry of Public Safety in China. It also received a GSN 2013 Homeland Security Award for Best Explosives Detection Solution. All Implant Sciences products are recognized as Qualified Anti-Terrorism Technologies by the Department of Homeland Security. For further details on the Company and its products, please visit the Companys website at www.implantsciences.com.

Safe Harbor Statement

This press release may contain certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on managements current expectations and are subject to risks and uncertainties that could cause the Companys actual results to differ materially from the forward-looking statements. Such risks and uncertainties include, but are not limited to, the risks that we will be required to repay all of our indebtedness to our secured lenders by March 31, 2015; if we are unable to satisfy our obligations and to raise additional capital to fund operations, our secured lenders may seize our assets and our business may fail; we continue to incur substantial operating losses and may never be profitable; our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern; there is no guaranty that the Transportation Security Administration (TSA) or any other US or foreign government and law enforcement agencies or commercial consumers will purchase any of our explosives detection products or that any new products we may develop will be accepted by the TSA or by such other governments, agencies or consumers; economic, political and other risks associated with international sales and operations could adversely affect our sales; liability claims related to our products or our handling of hazardous materials could damage our reputation and have a material adverse effect on our financial results; our business is subject to intense competition; our markets are subject to rapid technology change and our success will depend on our ability to develop and introduce new products; we may not be able to retain our management and key employees or identify, hire and retain additional personnel as needed; we may not be able to enforce our patent and other intellectual property rights or operate without infringing on the proprietary rights of others; and other risks and uncertainties described in our filings with the Securities and Exchange Commission, including our most recent Forms 10-K, 10-Q and 8-K. Such statements are based on managements current expectations and assumptions which could differ materially from the forward-looking statements.

Contact:

Implant Sciences Corporation
Company Contact:
Glenn Bolduc, CEO
978-752-1700

or

Investor Contact:
Laurel Moody
646-810-0608

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/implant-sciences-to-sponsor-session-on-the-future-of-aviation-security-at-avsec-world-2014-conference-in-washington-dc-134173317.html

SOURCE Implant Sciences Corporation

Judge OKs Toll Road operator’s reorganization plan

MUNSTER, Ind.— A federal bankruptcy judge has approved a reorganization plan for the private operator of the Indiana Toll Road that should expedite the sale of the lease for the 157-mile highway.

The (Munster) Times reports US Bankruptcy Judge Pamela Hollis in Chicago on Tuesday approved the plan that would put the 75-year lease out to bid.

Toll road operator ITR Concession Co. declared bankruptcy on more than $6 billion in debt on Sept. 21. The Chicago-based company is a subsidiary of an Australian-Spanish consortium that won the right to operate and collect tolls on the highway. ITR has received court approval for a pre-packaged Chapter 11 bankruptcy, which had the support of more than 98 percent of its senior secured lenders.

Just When You Thought You Were Out, They Pull You Back In

ABL Advisor, October 8, 2014

It is a rare occasion for a secured lender to foreclose on collateral with a value in excess of the entire debt owed, particularly following a bankruptcy filing by the borrower, but on that rare occasion the lender should heed the cautionary tale set forth in the 5th Circuit Court of Appeals recent decision in Wells Fargo Bank, NA v. 804 Congress, LLC. 1.

In the bankruptcy case of 804 Congress, LLC, Wells Fargo obtained relief from the automatic stay to conduct a foreclosure sale on the debtors primary asset, an office building in Austin, Texas. The bankruptcy courts order authorized Wells Fargo to conduct the sale pursuant to Texas law. The trustee under the deed of trust completed a non-judicial foreclosure sale of the property, which yielded proceeds in excess of the combined debt of both Wells Fargo and the junior lienholder. The trustee attempted to apply the sale proceeds first to the trustees 5% commission provided for under the terms of deed of trust, second to the senior debt owed to Wells Fargo (including pre and post-bankruptcy attorneys fees), and third to the debt owed to the junior lienholder, with the remaining balance to the debtor. The debtor objected to the proposed distribution and the bankruptcy court entered an order directing the foreclosure trustee to pay (i) $7,500 to the trustee rather than the contractual 5% commission of $217,750, (ii) Wells Fargo in full except for its $87,000 in attorneys fees and (iii) the junior lienholder in full.

The bankruptcy court ruled that Wells Fargo failed to follow the proper procedure for obtaining court approval of the attorneys fees and did not present evidence that the fees were reasonable. Similarly, the court held that the trustees 5% commission was unreasonable and reduced the amount. The bankruptcy court relied on its authority under section 506(b) of the Bankruptcy Code to determine the reasonableness of fees, costs and charges sought by oversecured creditors. Section 506(b) entitles a creditor whose claim is secured by collateral worth more than the amount of its debt to include as part of its secured claim against the collateral, post-petition interest and its reasonable fees, costs and charges provided for under the loan documents or state law.

On appeal by Wells Fargo, the district court reversed, finding that once the bankruptcy stay was lifted and the foreclosure sale completed, the bankruptcy court no longer had jurisdiction over the foreclosure sale proceeds, which should be distributed in accordance with state law and the loan documents. On further appeal by the debtor, the 5th Circuit reversed the district court, holding (i) Bankruptcy Code section 506(b), not state law, governs the amount to be distributed to a secured creditor that is oversecured, (ii) the lifting of the automatic stay to allow Wells Fargo to foreclose was not tantamount to an abandonment of the bankruptcy estates interest in the property, (iii) section 506(b) applies to both pre and post-bankruptcy fees, costs and charges and (iv) as a result the bankruptcy court retained the authority under section 506(b) to determine the reasonableness and allowed amount of the trustees commission and Wells Fargos attorneys fees.

The 5th Circuits opinion focuses primarily on its determination that a bankruptcy judge retains the authority to control the distribution of foreclosure sale proceeds to an oversecured creditor after evaluating the reasonableness of any fees and costs pursuant to Bankruptcy Code section 506(b). However, there are two novel aspects of the decision that may have ramifications for secured lenders. The first is a reminder that in some Circuits a bankruptcy judge has the authority to use section 506(b) to reach beyond amounts incurred during the bankruptcy case and disallow pre-bankruptcy fees, costs and charges even if those amounts are permissible under applicable state law and were incurred long before the bankruptcy case was filed.

In 804 Congress, LLC, the bankruptcy court disallowed all of Wells Fargos pre and post-bankruptcy attorneys fees. Citing both 5th and 11th Circuit precedent, the Court concluded that section 506(b) does not draw a distinction between fees incurred before a bankruptcy filing and fees incurred after. Although Bankruptcy Code section 506(b) is more commonly viewed as applying only to the determination of whether a secured creditor is entitled to recover post-bankruptcy interest, fees costs and charges, in those jurisdictions that have extended section 506(b)s reach, bankruptcy court approval may be required before applying foreclosure sale proceeds to standard pre-bankruptcy fees, costs and charges, such as unused line fees, collateral monitoring fees, late charges, valuation costs, and force-placed insurance.

The second interesting implication is the possibility that an order granting relief from the automatic stay, at least in the 5th Circuit, may no longer provide the exit from bankruptcy court most secured creditors have relied on in the past. One of the unanswered questions from the 5th Circuits decision is whether a secured lender will now need to return to the bankruptcy court for a separate order authorizing the distribution of foreclosure sale proceeds. The relief from stay order issued by the bankruptcy court in the case of 804 Congress, LLC explicitly authorized Wells Fargo to conduct a foreclosure sale in accordance with applicable state law. Similar language is standard in many bankruptcy district form orders across the country and most bankruptcy practitioners interpret such orders as granting a secured creditor the authority to both conduct a foreclosure sale and apply the foreclosure sale proceeds to the debt. That interpretation is called into question following the 804 Congress, LLC decision.

In reversing the district courts ruling that upon relief from the automatic stay, the sale proceeds should be distributed in accordance with applicable state law, the 5th Circuit held that the bankruptcy courts order lifting the stay simply allowed Wells Fargo to foreclose on the property in accordance with state law foreclosure procedures, but did not grant the trustee the authority to determine how the sale proceeds should be distributed. Moreover, while the 804 Congress, LLC decision focused on the application of the proceeds to the fees and costs of an oversecured creditor pursuant to section 506(b), the 5th Circuits reasoning in reversing the district court equally applies to the application of foreclosure sale proceeds to any portion of a secured creditors claim regardless of whether the creditor is over or under-secured. As a result, those parties relying on an order granting relief from the automatic stay to carry out certain actions, such as lenders, trustees, auctioneers and title insurers, should more closely consider the limits of such orders. One solution may be to request language in the relief from stay order authorizing the secured creditor to not only conduct the sale but also apply the sale proceeds in accordance with applicable state law and the loan documents. But some bankruptcy judges may be reluctant to give up their oversight authority before the amount of the sale proceeds is known.

It will be interesting to see how the bankruptcy courts apply the 5th Circuits decision in the near future. For now, secured lenders should be prepared to document and defend the reasonableness of all fees, costs and charges included in a secured claim, even those incurred well before the bankruptcy case was commenced, and also consider requesting authority to apply sale proceeds when obtaining relief from the automatic stay.

Endnote:
1. 756 F.3d 368 (5th Cir. Tex. 2014).

Trump Entertainment Plan Pegs Survival on Icahn, Cuts

Trump Entertainment Resorts Inc.’s restructuring plan hinges on billionaire Carl Icahn’s lender affiliates investing as much as $100 million and taking control of the company — if the Atlantic City, New Jersey, casino operator can get union concessions and tax breaks.

The company, which is trying to avoid closing its Taj Mahal casino next month, filed a restructuring plan in US Bankruptcy Court in Wilmington, Delaware, yesterday. Secured lenders controlled by Icahn would get 55 percent of the new equity and new debt for $292.2 million in claims under the plan.

Approval of the plan is the “best opportunity” to emerge from bankruptcy and save thousands of jobs, Trump Entertainment lawyers said in the disclosure statement describing the plan.

Lenders would make a $100 million equity investment if the company can reach a new labor agreement cutting costs and persuade local and state governments to reduce property taxes, according to court documents.

The casino operator has attempted to trim some costs by seeking concessions from its union that would have eliminated existing pension and health-care plans.

Trump Entertainment, which owns two properties in the struggling resort town, filed for bankruptcy Sept. 9 for the third time. The company closed the Trump Plaza on Sept. 16 and may shutter the Taj Mahal by mid-November if it can’t cut costs.

Five Closings

Atlantic City began with 12 casinos this year and the Taj Mahal would be the fifth to close in 2014. The city has been losing business to other eastern US states, and the Trump casinos said they have been seeing steeper revenue declines than their peers.

The company had a $5.1 million loss last year, according to court papers. It listed assets and liabilities of as much as $500 million each.

It will seek court approval to terminate its collective bargaining agreement with its union at a hearing tomorrow.

Donald Trump, the real-estate tycoon and reality-TV star who founded the company, began investing in Atlantic City in the early 1980s. He has no involvement in Trump Entertainment now.

The case is In re Trump Entertainment Resorts Inc., 14-12103, US Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Peter Blumberg

Decision Near On Harbinger’s LightSquared Debt Guaranty Hit




By Andrew Scurria

Law360, New York (October 27, 2014, 5:38 PM ET) — Harbinger Capital Partners LLC can expect a decision later this week on its attempt to wipe out a $1.7 billion guaranty claim asserted by a group of secured lenders against the smaller half of LightSquared Inc., the judge handling the gnarled Chapter 11 case said Monday.

Philip Falcones hedge fund, which holds a controlling position in LightSquareds equity, has offered up a Chapter 11 plan that would reorganize the debtors parent entity LightSquared Inc. separately from the LightSquared LP unit where most of its valuable wireless…

Citigroup Beats on Q3 Earnings, to Exit 11 Global Markets

Quarter in Detail

Revenues of Citigroup came in at $19.6 billion for the quarter, up 9% from the prior-year quarter. Excluding CVA/DVA, Citigroup revenues increased 10% from the prior-year period to $20.0 billion. The rise was primarily driven by higher revenues from Citicorp and Citi Holdings. Also, the revenue figure was above the Zacks Consensus Estimate of $19.02 billion.

At Citicorp, revenues came in at $18.0 billion, up 8% year over year. Excluding CVA/DVA, revenues were also up 8% from the prior-year quarter. Increased revenues in the Institutional Clients Group (ICG) and GCB led to this rise.

Further, Citi Holdings reported revenues of $1.6 billion, up 26% year over year. Revenues were up 30% year over year excluding CVA/DVA, mainly due to gains realized on the sales of consumer banking business in Greece and Spain as well as reduced funding costs. These positives were partially offset by losses on the redemption of debt related to funding Citi Holdings assets.

Operating expenses at Citigroup were up 6% year over year at $12.4 billion. Expenses included the impact of increased legal and related costs and repositioning charges in Citicorp, an adjustment to incentive compensation expense, and elevated regulatory and compliance costs. These were partially offset by continued cost reduction efforts and the overall decrease in Citi Holdings assets.

At quarter end, Citigroups end of period assets was $1.9 trillion, up 1% year over year. The companys loans and deposits decreased 1% year over year to $654 billion and $943 billion, respectively. Citi Holdings assets decreased 16% from the prior-year quarter level to $103 billion and represented just 5% of the companys total assets at third-quarter end.

Credit Quality

Citigroups credit quality improved in the reported quarter. Total non-accrual assets declined 19% year over year to $8.0 billion. The company reported a 38% fall in corporate non-accrual loans and a decline of 13% was reported in consumer non-accrual loans.

Citigroups total allowance for loan losses was $16.9 billion at quarter end, or 2.60% of total loans, down from $20.6 billion, or 3.16%, in the prior-year period.

Capital Position

At the quarter end, Citigroups estimated Basel III Tier 1 Common Ratio was 10.7%, up from 10.5% in the prior-year quarter, mainly driven by retained earnings and deferred tax asset (DTA) utilization. The companys estimated Basel III Supplementary Leverage Ratio for third-quarter 2014 was 6.0%, up from 5.1% in the prior-year quarter.

As of Sep 30, 2014, book value per share was $67.31 and tangible book value per share was $57.73, up 4% and 6%, respectively, from the prior-year period end.

Other

Following the earnings release, Citigroup disclosed findings related to an investigation into its Mexico subsidiary, Banamex that provided personal security services. The investigation detected illegal conduct, including fraud of around $15 million. The company has notified the issue to law enforcement bodies and regulators in the US and Mexico. The company is set to disband the unit and such services will be provided by the companys global security function wing.

Per Citigroup Chief Executive Officer, Michael Corbat, While the fraud is not financially material, the conduct of the individuals involved is appalling. Now that this investigation is complete, we intend to hold the individuals who conducted these activities accountable.

Our Viewpoint

Following the dismal second-half 2013 performance, Citigroup began 2014 on a positive note. The reported quarter marked the third consecutive quarter of earnings beat for this banking major. On the whole, revenues and its profit level outpaced expectations.

Citigroups underlying franchises of the consumer businesses and revenues have continuously been under pressure for the past several quarters. While we believe that robust top-line expansion will remain elusive in the near term given the tepid economic recovery, we remain encouraged by the companys continuous restructuring efforts.

Moreover, improving credit trends are expected to counter the negatives. One can consider a strong brand like Citigroup to be a sound investment option over the long term, given its global footprint and attractive core business. However, amid rising expenses along with the thrust of new banking regulations, there will be pressure on fees and loan growth.

Citigroup currently carries a Zacks Rank #3 (Hold).

Among other Wall Street giants, Wells Fargo amp; Company (WFC – Analyst Report) earned $1.02 per share in third-quarter 2014, thereby surpassing 99 cents earned in the year-ago quarter. However, the reported figure was in line with the Zacks Consensus Estimate.

Bank of America Corp. (BAC – Analyst Report) and KeyCorp (KEY – Analyst Report) are set to report results on Oct 15.

The States With the Least Credit Card Debt

Midwestern states have some of the lowest costs of living in the US, so it makes sense that most of the states with the least credit card debt are in that region. At the same time, consumers who live in states with low costs of living tend to have lower credit limits — when it comes to credit card debt, the debt-to-limit proportion is much more telling than the sheer value of credit card balances.

North Dakotans lead the country on both accounts. The state has the lowest average credit card balance and lowest average credit utilization, according to second quarter data from the Experian-Olivery Wyman Market Intelligence Reports. Using Experians IntelliView tool, we sorted average credit card balances and credit limits of the 50 states plus DC, and North Dakota came out on top. Its the only state with an average credit utilization lower than 18%.

North Dakota isnt the least expensive state in the country, but its about average — the Missouri Economic Research and Information Centers second-quarter cost of living index lists Mississippi as the cheapest. The thriving economy certainly helps debt levels in the state, as it has throughout the oil boom of the last few years. Heres how other low-debt states compared to North Dakotas impressive stats, ranked by average credit card balance.

See Where You StandSign up at Credit.com and get your FREE Credit Score plus personalized Action Plan to help you improve it. FREE and updated every 30 days.
Get Started. Its FREE. gt;gt;gt;

10. Wisconsin
Average credit card balance: $1,473
Average credit limit: $8,129 (18.11% utilization)
Cost of living index (100 points is the national average): 97.5

9. Indiana
Average credit card balance: $1,471
Average credit limit: $7,252 (20.29%)
Cost of living index: 90.9

8. Pennsylvania
Average credit card balance: $1,469
Average credit limit: $7,724 (19.01%)
Cost of living index: 101.9

7. Kentucky
Average credit card balance: $1,454
Average credit limit: $7,072 (20.55%)
Cost of living index: 92

6. Florida
Average credit card balance: $1,447
Average credit limit: $7,142 (20.26%)
Cost of living index: 99.8

5. Ohio
Average credit card balance: $1,445
Average credit limit: $7,430 (19.45%)
Cost of living index: 94.3

4. Michigan
Average credit card balance: $1,438
Average credit limit: $7,400 (19.44%)
Cost of living index: 92.1

3. Iowa
Average credit card balance:$1,411
Average credit limit: $7,804 (18.08%)
Cost of living index: 92.8

2. New York
Average credit card balance: $1,398
Average credit limit: $7,354 (19.01%)
Cost of living index: 131.8

1. North Dakota
Average credit card balance: $1,366
Average credit limit: $7,725 (17.68%)
Cost of living index: 101.4

The standout on this list is New York, because its generally not a cheap place to live. Just the more expensive parts of the state skew the cost of living index higher, it would make sense for the credit card spending of consumers living in those pricey areas to skew debt levels higher, but thats not the case. This data actually makes New Yorkers look exceptionally responsible with money.

Regardless of where you live, credit card debt can be one of the most difficult things to tackle when trying to repair your credit: Having a high balance on your cards will hurt your credit score, and it can be extremely challenging to break the spending habits that got you into debt in the first place. Having a poor credit score wont make you a credit exile — for instance, there are some¬†credit cards for people with bad credit — but it can make your finances more challenging. One of the best ways to improve your credit while tackling debt is to prioritize making payments on time and reducing spending, so you can chip away at your credit card debt rather than add to it. To see how your credit card spending affects your credit score and how you can improve it, you can check two of your credit scores for free on Credit.com.

More on Credit Cards:

  • 6 Smart Credit Card Strategies
  • Tips for Paying Off Credit Card Debt
  • How to Get a Credit Card With Bad Credit

Image: Ingram Publishing

Sign up for our weekly newsletter.

Get the latest tips advice from our team of 30+ credit money experts, delivered to you via email each week. Sign up now.

Ways to Get a Credit Card after Bankruptcy

Rebuilding your financial life after bankruptcy is not easy. Your credit score has taken a tremendous hit and needs to be increased. This will take time but you must be diligent in working toward this goal. One way for people with bad credit to do this is through the proper use of a credit card. Here are some different ways to get a credit card after bankruptcy so you can get back on the correct financial path.

Get a Secured Credit Card

Secured credit cards are good tools for building credit. They act just like traditional credit cards, with one major catch. Instead of borrowing money from a credit card company, you will borrow money from an initial deposit you make on the card. If you put $2,000 on the card, that is going to be your credit limit. You can swipe your card and pay back the balance over time just like you would with any other credit card.

Why would you ever want to pay interest and annual fees for a secured card where you have put up the money that you will borrow? Because that is the price you have to pay for the secured credit card provider to report your payments to the credit bureau. If you build your credit enough to qualify for another card, you can simply cancel your account and get your money back, less any transactions that are still pending on the card.

Find a Cosigner

If you have a friend or family member who is willing to cosign on a card, you might be able to obtain a card with that persons credit. This is similar to what you might do to get a car loan or mortgage loan after bankruptcy. The cosigner puts his or her credit on the line and commits to paying off the loan or credit card payment if you fail to do so. Pay on the account successfully and both of your credit scores go up. Miss payments and each of your credit scores decrease.

Not all credit cards will allow for cosigners. You will still need to look for a credit card company that will work with bad credit applicants. Under the right circumstances though, this can give you an opportunity to get back in the credit world.

Apply for Credit Cards That Accept Bad Credit

Some credit card companies specifically target applicants with bad credit. In fact, you may find yourself overwhelmed with credit card offers after bankruptcy. These issuers figure you will be motivated to preserve your newfound credit, which means you will be more likely to make payments on your accounts than you were in the past. You could take one of these opportunities as a way to build your credit score.

Most credit cards for people with bad credit have high interest rates and low spending limits. If youre holding out for a card with an amazing rewards package, prepare to wait a long time. You will probably pay an incredibly high APR on your first credit card after bankruptcy. Watch out for extra fees you might have to pay on these cards.

Wait a While

If the options above do not sound appealing, you may simply have to wait a little while to apply for a credit card after bankruptcy. Time can be an ally after bankruptcy as long as you make positive payments on any accounts you still have open. For instance, if you were able to keep your car and home when you filed for bankruptcy, you will need to focus on making payments on time every month. One late payment can significantly damage your ability to build credit after bankruptcy.