It can be shocking to hear of a challenging financial circumstance involving someone who has experienced a significant amount of wealth. The reality is that even the rich and famous stand to overspend or live beyond their means. Chances are you aren’t one of the rich and famous, but, this doesn’t mean you don’t still have options. With a clear picture of the options and proceedings that lie ahead provided by a lawyer, you can have peace of mind in knowing what the process entails and how they will ultimately recover in the long run.
A Snapshot of Famous Celebrity Bankruptcies
Through the years, a number of celebrities have filed for bankruptcy:
In 1996, MC Hammer filed for bankruptcy with approximately $10 million dollars in debt.
In 2003, Mike Tyson had more than $23 million dollars in debt, including a divorce settlement and back taxes owed to the IRS.
In 1990, Willie Nelson was in serious debt with the IRS, owing nearly $16 million, which resulted in filing for bankruptcy.
Kim Basinger filed for bankruptcy in 1993 after failing to fulfill her end of a movie contract. After owing more than $8 million dollars to filmmakers, she later had to file for bankruptcy.
In 1996, Burt Reynolds filed for bankruptcy after finding himself with $10 million dollars of debt after his divorce from Loni Reynolds.
More Money/Different Options
The type of bankruptcy you may file really will depend upon your specific financial situation. An attorney can work closely with you to assist in identifying the most appropriate option for you. It’s most likely that either Chapter 7 or Chapter 13 will make the most sense. Here’s a look at these two options:
Chapter 7: this form of bankruptcy is also known as a liquidation. This allows for debtors to have their debts wiped clean, allowing them to start anew. Chapter 7 can eliminate debts such as medical expenses, credit card debts and personal loans. You must qualify for Chapter 7 by passing a means test that shows you are unable to repay your debts. Although qualifying for Chapter 7 may wipe the slate clean, you may risk losing valuable assets that are important to you. This is a reason it’s important to speak with a lawyer before making any decisions.
Chapter 13: this form of bankruptcy is known as the wage earner’s bankruptcy. Meaning, if you are making a viable wage and have the ability to pay back your debts, you may do so by presenting a repayment plan to the court. In most cases, debts are repaid over a period of 3-5 years. One significant benefit to Chapter 13 is that it may allow you to retain some of your assets, such as your home.
With our help, facing bankruptcy doesn’t have to feel like a stressful process. In fact, once the automatic stay has been granted and the process is initiated, many of our clients experience a sense of relief.
Although your financial situation may be vastly different than that of a celebrity, you still have options to choose from when considering bankruptcy. Whether you file for Chapter 7 or Chapter 13 bankruptcy, with time, you will have the ability to build back your credit and persevere. A lawyer can help you during what can be a dire time in your life. Contact a law firm today so that they can begin reviewing your situation, your wishes and discussing with you the options that may be in your best interest.