Twinkies have been around more than eighty years and during that time they’ve become something of a cultural icon. In the recent blockbuster hit, Zombieland, there is a comedic interplay between the gruff main character, Tallahassee, and his affectionate nostalgia for the childhood treat. Even President Bill Clinton is reported to have placed a Twinkie in a time capsule as a child.
Unfortunately for Twinkie lovers everywhere the Hostess company has not been doing well. This Chapter 11 case is its second in the last few years and it still remains $860 million in debt. Informally, two quick Chapter 11 bankruptcies are called a, “Chapter 22”. A “Chapter 22” is generally done when a business is going to be completely liquidated, which I don’t believe is the case with Hostess. Movie Gallery Inc. and Polaroid Corp., were forced to liquidate upon their second Chapter 11, but two more obscure companies, Hayez Lemmerz International and Pliant Corp., an auto and packing company respectively, survived multiple bankruptcies.
If Hostess is liquidated, it’s assets will be sold to the highest bidder. This fact alone will not mean the end of the iconic Twinkie. Whoever buys the Twinkie rights will likely produce it just as we remember. Hopefully for Hostess, they’re successful in avoiding liquidation, but either way, I think we’ll see our beloved Twinkie around for another 80 years.
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Hostess Files for Chapter 11 Protection, again.
The Mortgage Debt Relief Act of 2007 was enacted as a response to the growing foreclosure problem. More specifically, it addresses the issue of “Debt Forgiveness Income.” Debt Forgiveness Income is an IRS theory that if a debt you owe is forgiven, you have gained in monetary value because you no longer are required to pay that debt. That gain in value is taxable as income despite the fact that you didn’t actually earn any money. For example: Stephen owes $5,000 in old medical bills. He can’t pay the bills, so the hospital forgives the debt and writes it off on their taxes. Come tax time, he will receive a Form 1099 for $5,000 of additional, previously untaxed, income for that year. Now, $5,000 may not be too much of a problem, even in the highest tax bracket this would only increase his taxes by $1,750, the trouble starts when the amount forgiven is higher, as it is with a house. 
When someone files for bankruptcy protection they don’t expect to have their discharged bills come back to haunt them. 
Upon filing for bankruptcy protection, an automatic stay is put in place. This means that creditors can not try and collect from you. So a creditor cannot call you to request payment, send bills to you, garnish your wages anymore, or repossess your car without court permission. If there is a foreclosure suit against you, that suit must also stop immediately. If your home is sold and you filed prior to the sale, that sale can be vacated. Obviously, this is a powerful tool bankruptcy. Many people file to stop creditors from taking actions against them or their property.