Advanta Corp is a company that offers small businesses credit cards in the United States. Yesterday the lender filed for bankruptcy protection. The company, in its filing with the U.S. Bankruptcy Court for the Deleware District, listed assets of $363 million and debts totaling $331 million.

The company came into hardships after many of its small business clients simply could no longer afford to pay the balance or the minimum payment on credit cards lent by the company because they had also come under economic hardships. According to the company, it is trying to collect $2.7 billion from the accounts of 360,000 customers. The accounts are closed to new charges, but the outstanding balance is killing the company.

It had decided to shut down its credit card lending business five months ago to try to keep something like this, or worse, a takeover of its bank by the FDIC, from happening. however, it appears as though the bank will likely be taken over by the FDIC shortly because its level of capital is below regulatory requirements.

The company said that it has almost $100 million in cash and cash equivalents available, but would not be capable of meeting all of the debt obligations that will become due. There are around $138 million of senior retail investment notes still outstanding. The company’s largest unsecured debt holder is the Bank of New York Melton; it is investing in $230 million in debt for the lender.

Due to the announcement, of course, the stock for the publicly traded company fell 70%. It fell from 25 cents to 8 cents after hitting its all time low of just seven and a half cents.

Not included in the bankruptcy filing is Advanta Bank Corp. Also, customers who are making payments to their credit cards need to continue making payments on time because this has no effect on those accounts.

CIT Group Inc. said that it might still have to file for bankruptcy protection if there isn’t a strong presence of bondholders to participate in a debt exchange that was recently introduced.

CIT is a commercial lender, that is one of the country’s largest lenders to small and medium sized companies, that borrowed $2.3 billion in TARP funds, which would be completely lost if the company decided to file for bankruptcy. The announcement that it may file for bankruptcy came only a day after major bondholders decided to provide the company with a $3 billion rescue loan. However, in a filing with the SEC, the company said that the loan from the bondholders may still not be enough to relieve the financial problems in the company. The loan doesn’t come cheap for the company, the minimum interest rate on it is 13% due to the risk the lenders are taking.

According to the company, it needs to pay back about $7 billion in debt that is maturing through the next year, one billion of that will mature in August alone. The company was forced to ask bondholders for the cash when the government basically told it that it was on its own and would not give the company any more money.

If the company cannot get enough tender offers for the debt which is coming up in less than a month, it will likely file for bankruptcy protection. If it were to collapse, there is a chance that it would be a very hard blow to the economy and the retail sector will be hit particularly hard as CIT is a large short term lender to around 2,000 vendors that supply merchandise to approximately 300,000 stores.

If CIT is allowed to go under, which it most likely is unless it can raise the capital on its own, then there will definitely be some kind of ripple effect that goes throughout the retail sector and everyone will feel it. Stores may not be able to get merchandise in and prices for retail items may even go up since suppliers can’t get funding for merchandise.

I sincerely hope the company doesn’t go out into bankruptcy because our economy is already hurting, a blow like this would cripple it.

Once upon a time, Reader’s Digest was a staple in many American households. Well, maybe I’m over exaggerating, but I know that every time I walked into my grandmother’s house she definitely had the newest copy sitting on her coffee table. And, to a five year old, if my grandmother had every single copy, it just had to be an American staple.

Well, now that magazine that I grew up around has filed for bankruptcy protection. Facing debt payments and the decline of print in an internet age, Reader’s Digest simply couldn’t keep up. The magazine’s readership numbers have been declining since the 1970’s.

The magazine’s publisher expects the company to emerge from bankruptcy in 45 to 90 days.

The company piled on debt following a $1.6 billion leveraged buyout in 2007 by investors led by Ripplewood Holdings LLC, a New York private equity firm, to take Reader’s Digest private. In such a transaction, investors typically borrow heavily to acquire a company, betting that operations would generate enough cash to cover the debt payments.

I would like to see the magazine stick around simply because it’s something that I associate with my childhood (and doctor’s offices for some reason). It would be kind of sad to see something like that just disappear forever. I feel the same way about other things though too, not just this magazine. When I found out that Nickelodeon studios in Orlando had become something else, I was actually quite sad because when I was young I always wanted to visit it and see the slime fountain.

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