Category Archives: Bankruptcy

Sports Authorities Shutting Down

Sports Authority, in planning to close all of its stores,is set to launch its going-out-of-business sales this week, according to court documents.

In shutting down, the 463-store chain becomes the latest casualty among rivals for the sporting-good business. It follows the recently announced closure of the Sport Chalet chain, based on the West Coast. While sporting goods and athletic wear sales are growing, traditional retailers like the two chains have been hurt by competition from online.

Sports Authority’s final sales are expected to start by Friday and finish by the end of August, the documents state.

The big-box chain, which filed for bankruptcy protection less than three months ago, had initially planned to try to sell or close about a third of its retail sites in order to strengthen and streamline its operations.  But the retailer, based in Englewood, Colo., added that if attempts to restructure its debt failed, it might close all of its stores.

The Sports Authority closings come on the heels of another athletic goods retailer,Sport Chalet, taking similar action. The chain stopped online transactions and began closing sales at its nearly 50 stores in April.

Sports Authority, which was owned by the Los Angeles-based private equity firm Leonard Green & Partners, has said that it was hampered by $1.1 billion in debt, and was late in picking up on shifting consumer trends.

But the growing number of consumers doing their shopping online has roiled brick and mortar retailers across the board, whether they sell t-shirts or tennis rackets. And Sports Authority has acknowledged that online competition played a key role in its demise.

“It’s a hypercompetitive industry,’’ says Katie Nemec, spokeswoman for the National Sporting Goods Association,  who added that online retailers who don’t have to tack sales tax onto merchandise get “an unfair advantage . . . If that company is in a state where they don’t have to charge it, we see it almost as a discount to the consumer.’’

The amount of athletic and sport equipment sales made online grew to 15.8% last year from 11.8% in 2010, according to the National Sporting Goods Association. Online sales of athletic and sport footwear increased to 17.2% of all such sales last year, from 12.8% in 2010.

Still, it’s not just sporting goods sellers that are struggling. “It seems like every retail industry is dealing with its own set of challenges,’’ Nemec says. “I certainly don’t think the sporting goods industry is the only one.’’


Is Bankruptcy the Answer? How to decide

Filing bankruptcy is not something anyone makes plans to do in their life. Situations arise, however, that may cause you to consider it. If you have found yourself asking if bankruptcy is the answer to your financial situation, use the following information to help you decide.

Types of Personal Bankruptcy

  • Chapter 13 – Creates a repayment plan where the filer pays off their debts within three to five years. For instance, if you were unemployed and got behind on your mortgage payment, but now have a job where you are able to make the payments, Chapter 13 can be helpful. This type of bankruptcy halts collection attempts and foreclosures, allows you to keep your assets, and requires you to repay the missed payments in your payment plan.
  • Chapter 7 – Wipes away all debt. This option is for those with extremely high debt, or for those who don’t have enough income to qualify for a payment plan. This choice may be the best option for those who don’t own their own home and have mounting medical bills. Individuals must qualify for Chapter 7 bankruptcy. Certain qualifications include income below the state median or debts so high that paying them is not feasible with the income.

Have You Had A Major Life Event?

Bankruptcy can be helpful when individuals experience major events in life that drastically increases their bills, reduces their income, or a combination of both. Most people who file bankruptcy do so as a result of medical bills, unemployment, or divorce.

Are You Ready To Pay For Bankruptcy?

Filing bankruptcy isn’t necessarily cheap. Depending on where you live and the attorney you use, it can cost several thousand dollars. Typically, Chapter 7 runs from $1,000 to $2,500 and Chapter 13 can be from $2,000 to $4,000. With Chapter 13, though, you can include the costs in your plan, but you can’t do that with Chapter 7.

Most attorneys do offer free consultations. If the price is an issue, let the attorney know and they may be able to work something out. Just be wary of anyone who is not an attorney and offers to help with bankruptcy.

How Will Bankruptcy Affect Your Credit?

A bankruptcy will be notated on your credit report. However, if you have already been dealing with financial issues, such as charge-offs and missed or late payments, the bankruptcy may not damage it too bad. Some consumers even see their credit improve around a year or so after filing. The bankruptcy will typically stay on a credit report for about 10 years, but as it ages, it begins to weaken its effect on obtaining new credit.

How Will Filing Bankruptcy Affect Joint Account Holders?

Filing for bankruptcy dissolves your obligations, but if you have accounts where a spouse is a joint account holder or a co-signer, they then become solely responsible for the debt. This situation typically happens after a divorce. One way to solve the dilemma is to either pay off the bills after the divorce or place the debt in only one person’s name.

How Will You Feel If Your Financial Information Is Public?

Not everyone knows that when you file bankruptcy, it is a public matter. Anyone who is interested can see your most recent financial information. Since many people don’t know this, most people won’t try to look, but it is something to be cognizant of.

Bankruptcy is a big decision, but it is not the end of the world. As you decide what is best for your financial situation, use the information shared here. It also best to consult with a bankruptcy attorney to discuss your options.

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