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CLARION LEDGER
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11/2712008

t o w have been agd will most likely. You certainly may be able to get some operationsunder Chapter 11,itd - :,.

T
he fXout A m the current m m i c
downturn is hittingretailers hard.
Linens 'n Things, a home goods
memhandiser, isgoing out of business.
often still redeem gift cards, service9li-
-..continueto be& tlk dark, wonderingif fantastic product dealswhen a company . . ..
: !
filesfor bankruptcy, but there are some tomers and deliver goods.
they'll wer get the goods they paid for However, beforewarned that some ,:
Skoruna.
--.-. - editor-m-c or ifthe giftcards they are holding are things you need to know toprotect
r-~, - ~

yourself, the BBB advises. Chapter 11bankruptcies can quicldy .,

Last month, it began closeout sales at
its remaining371stores in 48 states.
More than $1billion of the retailer's
home furnishings will be sold by liquida-
tors.
New York-based Steve and Bany's,
which soldnice but inexpensivecloth-
ing, intludinga line developed by tennis
starvenus WIlliarns, is being shut
down.
Circuit City is under Chapter 11
bankruptcy protection.
By the end of the year, an estimated
I
- \$
for RISNWS, which fol; even w&h anythixig," Coxsaid. turn into a Chapter 7 liquidation. If that
lows the retail industry. Put the words "in bankruptcy" beside First, you nGCftounderstand what it
the name of a retailer and it scares off means when a business files for Chapter happens, the chancesfor the wnsumet.
In the first half of this to receive any compensationare greatfy
year, business bankrupt- . some customer&In some cases the fear 11or Chapter 7.
,isn't necessary, Kmart filed for bank- . .., Under Chapter 11,a business intends diminished. the BBB says.
cy filings increased41.6 .
percent compared with
ihe same peAod in 2007, and the U.S.
mptcy protection and survived to.seu
another day.
to reorganize while stayingopen. The
filing allows court actions against the Takingyour chances
company to stop while management SO,to shopor not shop at aretailer
econom~w nearly 34,000busiies..
no under. said Steve COX.a spokesman Chapter 7 VS. Chapter 11 tries to get wntrol over its finances
With a Chapter 7 filing, a company is
under bankruptcy protection, that isthe
question. Here's what you can expect if I
fbr the ~ k t t e ~usiness&e>u.
r But others don't recover. Cmne are
Ward retail stores sayingessentially it's broke, and its a retailer files for Chapter 7, according
"Inthe w & e ~ ~ w ~ i ~ 5 ~ k r u the o t hlontgomery
- to the BBB:
ties, andwith many businessespi&ng (although the b m r l name hasre- assetsare liquidated to pay creditors.
If a b~pinessintends to continue $~_SMGLETARY. 12B
their hopes on the holiday season, cus- , emerged online). !

Singletary: You could get ripped off

~ r o d h ~ tryto help consumersin a dis- holding on to a gift card from a
I f you have products or sew- puted transaction,even if you've retailer that eventually went
ices that haven't been delivered. already paid your bid. In some bust. The BBB advisesthat you
you might get burned. ~nfortu-' cases, you may get similar pro- redeem gift cards as soon as p o s
nately, customers are at the back tection for somethingpurchased sible in order to avoid any
of the line to receive anything with your debit card even though headacheswith bankruptcy fil-
because when assets are sold, the Fair Credit BillingAct only in@ and court actions.
the proceeds are used to first pay applies to credit cards. "A Chapter 11bankru~tcvis
secured creditorsand any not somethingconsume& .
employeewages. Fear liquidation should fear," Skorupa said.
The BBB says that if you paid "What they should fear is liqui-
Seek 'chargeback' with cash or check, file a claim dation."
However, if you paid for a (typically within 90 days of the This holiday season when you
product or servicewith a credit bankruptcyfiling) and wait in pick up your newspaper, don't
card, you might get your money line. More information on filing Iook just at the salescirculars.
back. You can dispute any a claim, including downloadable You better be reading the busi-
charges with thelender that forms, is available onlineat ness section to keep up on which
issued the credit card using the www.uscouIts.gov. retailers are doingwell and
Fair Credit K i n g Act. You can T h e validity of any warranty which are going down.
request a "chargeback" from the wilI varv. If a retailer ~ o e out
credit card issuer. business, you might .&get-&r
I
s of I -
Michelle Singletary welcomes
Write to the credit cardcorn product concerns resolved under comments and column ideas,
pany as soon as you discoveryou the manufacturer'swarranty. In but cannot offer specific person-
won't get your product because many cases, extended war- , al financial advice. Her e-mail
of a bankruptcy filing. In your ranties and service plans are pro address is singletarym@wash-
letter, include your account num- vided by third parties andare post.com. Readers can write to
ber and the specificamount that typically not affected by a retail- her in care of The Washhgton
you are decliningto pay. er's liquidation. Post, 1150 15th St. NW, Wash-
Generally,credit cardissuers II learned the hard way about ington DC 2007 1.