Bankruptcy

CIT May Be The Christmas Grinch

By writer

CIT Group, Inc., the New York-based giant finance company, disclosed to federal regulators that it is experiencing major monetary difficulties. Just as U.S. retailers are starting to recover from a dismal 2008-2009 holiday season, CIT hammered still another nail into the retail coffin. The finance company is one of the country?s largest providers of factoring services, the business practice that keeps consumer goods flowing from factories to retailers.

CIT, which the Wall Street Journal reports has hired a bankruptcy attorney and is considering filing for bankruptcy, has already received $2.33 billion from the Treasury?s Troubled Asset Relief Program (TARP) in December 2008. It is now also considering the option of participating in the FDIC (Federal Deposit Insurance Corporation) temporary liquidity guarantee program. This program lets cash-strapped companies issue government-backed bonds in order to raise capital at lower cost.

As one of the nation?s largest factoring services, CIT is a major player in ensuring that retail orders get paid for and delivered to retailers. Without these factoring services, consumer goods bound for retail establishments could bring the 2009-2010 holiday shopping season to its knees for the second consecutive year; definitely a bleak prospect for an already bleak retail picture. Financial agents like CIT affect such retail mammoths as Wal-Mart and Target as well as smaller, independent stores.

So ? what does this all have to do with YOU? Think about it for a minute. If your favorite stores and shops don?t have the merchandise that you want and can afford to purchase, you?ll stop shopping there. They will have to close, letting their salespeople go and eventually closing their doors?which means more people on unemployment and more Americans seeking the protection of chapter 7 or 13 bankruptcy.

If you have questions concerns about your own personal bankruptcy, get in touch with one of our attorneys that focus in bankruptcy cases every day. Get your free legal evaluation today and don?t let the Grinch ruin your holiday season.

(source: Chicago Tribune, July 15 2009: CIT Woes an Ill Wind for Holidays)

Full post as published by Consumer Bankruptcy Blog from Legal Helpers on July 24, 2009 (boomark / email).