Personal Bankruptcy ABFS Investment notes

[mike_tanker]

Recently American Business Financial Services, Inc. (ABFS) has filed bankruptcy under chapter 11. As a holder of ABFS investment notes, do I have any legal recourse?

 

[Michael Wechsler]

Recently American Business Financial Services, Inc. (ABFS) has filed bankruptcy under chapter 11. As a holder of ABFS investment notes, do I have any legal recourse?

You will likely stand in line with all the other creditors unfortunately. This will probably be dealt with in bankruptcy court and you will deal with a custodian/trustee. I don't think there are any circumstances that will allow you extra priority over others by taking legal action but you will probably want to file your claim if you don't receive paperwork.

 

[timetobake]

Declaring loss on 1040 of unsecured notes

ABFS changed to chapter 7 sometime in the spring - it is/has closed its doors. The case is still in the courts. Can I declare the loss of the unsecured notes in full somewhere on my federal tax return, or is this not possible until the court proceedings are finalized? I have heard that sometimes people declare they sold a worthless security for $1, but there isn't any way to do this in this case, is there? Thank you for any advice.