Category Archives: Celebrity Bankruptcy

A Thumbs Up to Bankruptcy Law

English: Baseball with clock to represent a &q...

English: Baseball with clock to represent a “current sports or baseball event”. (Photo credit: Wikipedia)

After being sentenced to six and one half months in prison, 500 hours of community service, and to a fine of $200,000 in restitution, Lenny Dykstra, the now gray-haired former All-Star of the New York Mets and Philadelphia Phillies, gave a thumbs up to bankruptcy law as onlookers watched while he was led away from the court in handcuffs. Continue reading

Toni Braxton Rumors Fly on Possibly Facing Bankruptcy Fraud

Celebrity Toni Braxton is an American Rhythm and Blues singer, songwriter, record producer, actress, and philanthropist. She has won six Grammy Awards, seven American Music Awards, and five Billboard Music Awards in her career. Toni Braxton has sold over 60 million records worldwide, but despite her obvious financial success within various entertainment industries, she filed her second bankruptcy within four years on October 6, 2010, reporting over $50 million in debts. Now, she may be facing bankruptcy fraud. Continue reading

Warren Sapp Files Bankruptcy

 

Warren Sapp went to the Oakland Raiders after ...

Warren Sapp went to the Oakland Raiders after the Bengals appeared to have signed him (Photo credit: Wikipedia)

According to recent AP news sources, Warren Sapp, the seven time Pro Bowler who played for the Tampa Bay Buccaneers and Oakland Raiders, has filed bankruptcy in south Florida. Sapp reportedly owes creditors more the $6.7 million. It was also reported he owes back child support and alimony.

Included in the $6.45 million in assets that Sapp listed in his bankruptcy filing were 240 pairs of Jordan athletic shoes, an expensive watch, and a lion skin. His 2002 Super Bowl ring won while playing with the Buccaneers and his 1991 National Championship ring won while playing for the University of Miami were not reported on the list of assets. According to the AP news source, these items were reported as lost.

Sapp, retired from professional football, currently works as an NFL Network analyst where he reportedly earns $115,000 per month. According to the paperwork in the bankruptcy he filed, his NFL Network contract will be up this coming August. Sapp has recently come under fire from the Network for calling Jeremy Shockey a “snitch” for reporting that the New Orleans Saint’s participated in bounties.

Whatever financial problems Warren Sapp really has is not much different than a lot of his predecessors who have played football in the NFL, or at least, according to one sports magazine. Sports Illustrated wrote in an article in 2009 that “78% of former NFL players have gone bankrupt, or they are under financial stress because of joblessness or divorce.”

Certainly, divorce plays a large role in filing bankruptcy, but not everyone files for bankruptcy who gets divorced. When only 50% of those who marry get divorced, divorce cannot possibly play too big a role in as many as 78% of the former NFL players getting into financial trouble after their football playing days are over.

Realistically, with the amount of money payed to the average NFL player these days, I suspect the statistics provided by Sports Illustrated may be somewhat skewed, and there can be a much wider range of reasons a higher number of former NFL players go bankrupt than just divorce and joblessness. Other factors could include inadequate investment advice, lavish lifestyles, over indulgence in credit, failure to save, and a wide range of other expenses associated with just being rich and famous.

It might behoove the NFL to scientifically research such accusations if the data quoted by the popular magazine is anywhere close to the truth. For no other reason, the NFL and other professional sports should be interested in their policies for recruiting young men and women out of college before they graduate in preparation for life after professional sports. Not being prepared to financially take care of yourself may be a greater cause for bankruptcy than all the reasons for the NFL players going into bankruptcy already mentioned.

It doesn’t matter whether you are rich, famous, or skilled, unexpected things in life occurs. Bankruptcy just sometimes happens. If it happens to the rich and famous like Warren Sapp, it can happen to you as well. Preparation is always the best answer for overcoming these types of financial problems. If you are considering filing bankruptcy, enlist a bankruptcy attorney to help you prepare.

 

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High-profile cases illustrate need to heed counsel of good attorney

From politicians to businessmen, bankruptees display wide variety of circumstances

March 30, 2011

By Mike Hinshaw

Sometimes high-profile bankruptcies are celebrities such as movie stars, sports figures or high-roller business types.

Sometimes, though, they’re politicians. For instance, just last month we learned of Rep. Ruben Hinojosa’s (D-TX) filing, apparently driven by being unable to repay a loan for a family business.

State senator on high-ranking financial committees

Recently, a state senator from Kansas has entered the picture. According to a March 6 piece in The Wichita Eagle, “A Republican state senator who serves on the budget and banking committees has filed for personal bankruptcy.

“Ty Masterson, R-Andover, lists more than $800,000 in unsecured debts, not tied to assets or collateral.

“Often people filing bankruptcy are able to discharge those bills, which in Masterson’s case include credit cards, commercial loans and debts to local businesses.”

Problem is, Masterson told the paper, even though the debts are from a failed business, MasterBuilt Homes, “But I personally guaranteed the notes, so I have to file it under personal bankruptcy.”

The story says that Masterson disclosed financial troubles during his 2008 campaign for the state legislative body, saying he was working on $150,000 in court-ordered judgments. His December bankruptcy petition, however, shows the higher amount. Creditors include banks (commercial loans), a credit-card company (revolving account), and local businesses and vendors.

Not surprisingly, the case trustee had a dig for the senator: ” ‘I certainly hope Sen. Masterson is a better steward of the people’s money than he is his own,’ said Ed Nazar, a Wichita bankruptcy lawyer who, as the case’s trustee, represents the creditors.”

Masterson is vice chairman of the Financial Institutions and Insurance committee and also serves on the Ways and Means committee.

County board member’s debt includes back taxes

“Celebrity bankruptcy” might even extend to local couples who, in this case, are a politician and her  businessman husband. From a March 25 bit in the Omaha World-Herald, “A second-term Douglas County Board member and her husband recently filed for personal bankruptcy, and court documents show that they owe thousands of dollars in back taxes and debts to banks and retail businesses.

“Pam Tusa and her husband, Gary Tusa, a real estate agent, reported a combined annual income of about $53,000. She receives $35,500 annually as a county commissioner on the seven-member board.”

The couple filed a Chapter 7 petition, showing assets of  $24,357  and liabilities of $211,445, including $8,255 owed the Internal Revenue Service  for taxes from 2004 and 2006.

Ms. Tusa said the problem for them is that her husband is a Realtor who got clobbered by the downturn in the housing market. She told the paper “that her personal bankruptcy is unrelated to her ability to serve her constituents or to fulfill her duties on the board.”

Window company’s behavior leaves clients, installers out in cold

An unusual case involves both a defunct business in Pennsylvania and a personal bankruptcy filing in Florida. A company going out of business may not seem like a “celebrity” story, but you can bet customers who put down deposits then never get a product or service will certainly have that business on their minds.   A March 1 piece in the Philadelphia Inquirer says, “In a move whose effect on consumers was unclear, the founder of the troubled Windowizards home-improvement company declared personal bankruptcy in Florida. But claims continued to be settled with Philadelphia-area customers with unfinished orders.

“Consumer-protection officials in Bucks County, who have been consulting weekly with Windowizards founder Harvey Goodman since the Levittown business stopped completing orders around Christmas, said they learned of his Chapter 7  filing while probing the broader issues of what might have brought the window-replacement company to the brink.”
According to a local Fox affiliate, whose broadcast includes a reference to “the giant window” vendor, a bunch of contract installers were also left without answers–and the firm’s principals may face criminal charges:

Mike Bannon, the head of the Bucks County’s Consumer Protection Office, says he’s losing patience with Windowizards and may soon ask the district attorney to file criminal charges against the company on behalf of customers who have put down money on windows but have yet to receive them.

The news comes amid growing concern that the Levittown, Pa.-based company may be closing up shop, leaving customers and workers out in the cold.

About a dozen independent window installers gathered in Windowwizards’ parking lot on Thursday morning bracing against the cold and looking for answers.

The men say they are owed money for window installations and are trying to find out if the company is still in business.

All these examples should be taken to heart. The bankruptcy code serves a legitimate end and fits with the American character that recognizes people deserve a second chance. But the code is not there to further fraudulent activity. If you need to hit the financial reset button, do so with no shame–but do follow the counsel of your trained, experienced bankruptcy attorney.

Next time, we’ll continue with more interesting bankruptcy cases.

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Whatever you do, before making major, life-changing financial decisions, consider consulting a trained, experience attorney. If you think your home is a candidate for a short sale, be sure to ask your attorney about it–it could greatly affect your standing and strategy for starting over.

For bankruptcy basics, please see:

Bankruptcy FAQ

Introduction to Chapter 7

Introduction to Chapter 13

Case of former Apple exec, pioneer in video games an example of how high-rollers can wind up in bankruptcy

First in a series of instructive cases of bankruptcies involving celebrities, officials or other high-profile cases: most present examples of ‘what not to do’

March 28, 2011

By Mike Hinshaw

Sometimes celebrity bankruptcy is interesting merely because of the celebrity: the particular individual, a favored person with whom we sympathize or, perhaps,  schadenfreude in the case of a celeb we feel “has it coming.” Sometimes, though, celebrity bankruptcy can be instructive because they get into unusual situations beyond the pale of the typical loss of job, medical emergency, foreclosure situations that so many “regular people” face nowadays.

That’s certainly true of the first case we’ll look at in this series, that of  William M. “Trip” Hawkins, III, who created his own major at Harvard, nabbed an MBA from Stanford, then became a wheel at Apple and brought the hugely popular electronic game Madden Football to market (one among several award-winning, best-sellers for which he gets a design credit).

His Wikipedia entry says not only that “Hawkins was the Director of Strategy and Marketing at Apple Computer in 1982 when he left to found Electronic Arts (EA), a video game publisher. Electronic Arts had a successful run for many years under Hawkins’ leadership. It was once the world’s largest video game publisher and continues to hold the top spot among third-party publishers as of October 2009” but also that “In 2005, Hawkins became the eighth person to be inducted into the Academy of Interactive Arts and Sciences’ Hall of Fame.” It also says, “In 1996 3DO stopped developing the system and transitioned into a video game developer, making games for the PlayStation, PC and other consoles. However, due to poor sales of its titles, it went bankrupt in May 2003. ”

And that’s where we pick up the story, as reported in a March 25 blog at Forbes.com, where we see: “A San Francisco federal judge has rejected the effort of William M. (Trip) Hawkins III  to use personal bankruptcy to cancel more than $20 million of federal and California state tax obligations  stemming from abusive tax shelters he used to shield vast profits from Electronic Arts, the pioneering video gaming firm he founded nearly three decades ago.

“In a stinging 16-page opinion this week, US. District Judge Jeffrey S. White upheld an earlier bankruptcy-court ruling, saying Hawkins . . . knew he was insolvent after the Internal Revenue Service disallowed his tax shelters but ‘continued to spend money extravagantly with knowledge of his tax liabilities’ to the IRS and the California Franchise Tax Board. ‘Hawkins planned to defeat his taxes via bankruptcy and continue living the lifestyle to which he had grown accustomed,’  the judge declared. Cited evidence included purchase of a $70,000 car–the fourth vehicle in a two-driver household.”

The article mentions what video game devotees probably already know, that Hawkins went on to found Digital Chocolate, which reporter William P. Barrett describes as  “another prominent Silicon Valley gaming company that he started in 2003 and which has made a splash with games on other social platforms like cellphones and Facebook.  Well-known titles include Millionaire City, MMA Pro Fighter, Rollercoaster Rush and Tower Bloxx.”

I don’t know about any of that stuff, but I get what the judge is saying, especially since Trip has received more financing in the meantime, from some very substantial players, including Intel capital, according to the article. More background: Hawkins and wife “quietly filed” for Chapter 11 bankruptcy in 2006. I have no idea what that means. Who “loudly files” for bankruptcy protection? However, what really sticks out is the Chapter 11 filing. Almost overwhelmingly, individuals and couples almost always file for protection under either Chapter 7 or Chapter 13.

Chapter 11 is generally reserved for businesses that, instead of selling off assets to satisfy creditors under Chapter 7, are seeking a genuine reorganization plan. In other words, it’s a way to save the business (the company) while satisfying creditors as best as possible. In this case, by using Chapter 11, “The couple obtained a general discharge of their debts. But the two tax agencies successfully avoided the cleansing under a provision of bankruptcy law that prohibits discharge of tax debts if the debtor ‘willfully attempted in any manner to evade or defeat such tax.’ ” What broke the camel’s back? A Cadillac Escalade. Read on:

Hawkins used his deteriorating financial situation to seek a reduction in child support he owed his first wife. In a January 2004 family court filing, he admitted he was insolvent, and in that court he openly discussed the possibility of using bankruptcy to reduce his tax liability. And there, from the perspective of later judges, was the rub.  Although he sold real estate, including his home in tony Atherton, and made some tax payments, Hawkins “continued to make unnecessary and unreasonable expenditures despite this knowledge of his finances,” Judge White wrote. He cited records putting Hawkins’ monthly expenses in 2005 at $94,900. This included $4,500 for “child/dependent care” even though his wife was a stay-at-home mom, and $40,550 in “other expenses.” The judge also cited the monthly $1,208 payment on that fourth car, a Cadillac Escalade. Hawkins and his wife bought the vehicle for $69,974 in October 2004, “ten months after Hawkins had acknowledged his tax liability and insolvency,” the opinion noted pointedly.

Read the whole article, please. We can’t copy it, word-for-word. But the important thing is this: As we point out repeatedly, bankruptcy protection serves a legitimate purpose. It’s not meant for those who would game the system. The USA model of bankruptcy is based on providing a second chance for those who really deserve another shot at financial stability.

Next time we’ll look at a high-profile couple accused of fraud in Haiti who have turned to the bankruptcy courts.

****************************************************************** For bankruptcy basics, please see:
Bankruptcy FAQ
Introduction to Chapter 7
Introduction to Chapter 13

Toni Braxton faces Foreclosure

According to real estate data collected by RealtyTrac, foreclosures rose to a record 1.05 million last year, eclipsing the previous record of 918,000 a year earlier. That means 26% of all homes sold in 2010 were foreclosures. 2.9 million homes received foreclosure notices in 2010, with 20% more than that total expected to be in trouble this year. These foreclosure numbers aren’t expected to wane anytime soon, and it is not just the average American affected by the results.

Toni Braxton, the six-time Grammy winner, song writer, and actress saw her $2.6 million home in Henderson, Nevada, go into foreclosure and sell for a little more than $1 million after she and her company, Liberty Entertainment, filed for bankruptcy last September. According to news reports, after running up debts estimated between $10 and $50 million against $1 to $10 million in assets, Braxton also had her $1.2 million home in Duluth, Georgia, go into foreclosure proceedings. These events all occurred to Braxton after the star suffered a series of medical events that caused her to have to cancel a Vegas show contract in 2008. A heart condition was part of her medical problems, and Lloyds of London, her insurer, refused to cover her losses after taking the position that her heart problems were preexisting.

As you should be able to see from this illustration, bankruptcy and foreclosures can happen at anytime and to anyone. Foreclosure is usually a symptom of bankruptcy. In the case of Braxton, she has had more than one foreclosure and more than one bankruptcy. Being famous or financially successful is no indicator of future success because uncontrollable events can often occur to anyone. Becoming bankrupt can happen for a variety of reasons including but not limited to a divorce, catastrophic event, foreclosure on personal or business property, failure to pay bills on time, loss of income, health problems, poor business decisions, bad timing, bad advice, or a poor economy. In the case of Toni Braxton, she had medical problems, two foreclosures, and a loss of income. Bankruptcy happens, it can happen to you.

Filing for bankruptcy is a legal proceeding that is designed to protect both creditor and debtor and to allow the honest person or business to work their way out of a bad financial situation, or in some cases, to completely start fresh. As a society, we have come a long way since the days of debtor prisons and states. The Constitution provided for our protection against those antiquated ways when it gave Congress the power to legislate bankruptcy law making the primary laws governing bankruptcy federal. These federal laws are available to the average American as well as the famous ones.

There are two types of bankruptcies most individuals can file- a Chapter 7 or a Chapter 13. A Chapter 7, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A chapter 13 bankruptcy is the second bankruptcy available to individuals and is called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. If you have an income and qualify for a chapter 13, there are certain advantages for filing one. These advantages are: to save your home from foreclosure; to reschedule secured debts; to provide protection for co-debtors; to consolidate your loans under one plan; to keep non-exempt property; to extend certain tax obligations, student loans, or other such qualifying debts; and to qualify for bankruptcy relief. Filing a chapter 7 will not afford you these various opportunities listed.

If you are facing a foreclosure, maybe you should look at the possibility of filing for bankruptcy protection. Bankruptcy laws can be complicated, and common sense indicates you will probably need a bankruptcy lawyer in order to properly understand how these complex laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Tulsa, Oklahoma, contact us today at www.BankruptcyHome.com . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

The Rich and Famous Have Bankruptcy Problems Too

Muhsin Muhammad, born Melvin Campbell, is a retired American football player who played for the Carolina Panthers of the National Football League. He played wide receiver, was selected to the Pro Bowl in 1999 and 2004, was a Super Bowl record holder, and was given credit for being a touchdown dance pioneer. Muhammad received an estimated $20 million in lifetime earnings. According to news reports, Baylo Entertainment, Muhammad’s music company,  was sued by Wachovia Bank for allegedly failing to pay back $24,603.24 on a Visa Business Rewards credit card.  Also reportedly, Muhammad’s 8,200-square-foot lakeside estate, which boasts a custom spa and the “largest residential aquarium in the Southeast,”  could be found for sale on eBay for $1.95 million, $800,000 less than he initially asked.

The reports are not clear as to whether Muhammad is or was involved in bankruptcy proceedings, but the point of the story is to illustrate that even the rich and famous can have financial problems, and they do so on a regular basis. Bankruptcy, being no respecter of persons, can happen to anyone regardless of position in life, and because of it, there is no shame in going bankrupt. In the United States, when you find yourself bankrupt, there are legal proceeding you can use to protect yourself from creditors. It use to be that your creditors could put you in prison for failing to pay your bills, but today, filing for bankruptcy is a legal proceeding that is designed to protect both creditor and debtor and to allow the honest person to work their way out of a bad financial situation. This legal proceeding is covered by the Constitution of the United States. As a society, we have come a long way since the days of debtor prisons and states. The Constitution provided for our protection against those antiquated ways when it gave Congress the power to legislate bankruptcy law making the primary laws governing bankruptcy federal.

There are basically two types of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. The greatest majority of bankruptcy legal proceedings are of the voluntary variety. Even famous people can be forced into bankruptcy if they cannot pay their creditors on time, regardless of the reason.

The moment you file a  bankruptcy, a judge will order all collecting actions to cease, an important feature called the automatic stay. The automatic stay, applicable to all types of bankruptcy filings, means that the mere request for bankruptcy protection automatically stops and brings to a cessation certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. That means all creditors will have to go through a trustee in order to get any of their claims back. So, if you have gotten a foreclosure notice, and you want it to cease, filing  any bankruptcy will immediately stop the process giving you valuable time to regroup.

If the rich and famous can have bankruptcy issues, so can you. Bankruptcy laws were made to help you  if you are in financial trouble. A good rule of thumb to use in order to determine whether you might consider a bankruptcy is to determine if you have debts that cannot be paid back in five years. If you do, you may want to consider your bankruptcy options.

Bankruptcy laws are complicated, and common sense  indicates you will need a bankruptcy lawyer in order to properly understand how these complex laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan areas of Raleigh, Durham, and Chapel Hill, North Carolina, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

Bankruptcy Court Intended for the Honest Not Necessarily the Famous

Denny Hecker, the embattled former owner of two dozen auto dealerships as well as other businesses in the Minneapolis area, filed for bankruptcy in 2009 after credit from lenders he is accused of defrauding dried up. He was indicted on federal criminal charges in February of 2010 on 25 felony counts including money laundering, conspiracy and criminal bankruptcy fraud.

As a society, we have come a long way since the days of debtor prisons and states. The Constitution provides for our protection against those antiquated ways when it gave Congress the power to legislate bankruptcy law making the primary laws governing bankruptcy federal. State laws supplement the federal laws by honing out some of the necessary details. The laws have been designed to protect both creditor and debtor making bankruptcy a legal proceeding designed to allow the honest person to work their way out of a bad financial situation. The key word here is honesty. Bankruptcy laws were never designed to allow unscrupulous people the protection to hide their assets. Whether or not Denny Hecker was honest in his dealing with his assets will be up for a jury to decide.

For the majority of you who may have lost everything because of a divorce, foreclosure, bad business dealings, or bad advice, going completely broke may place you in the position of having to file for bankruptcy. Sometimes, filing for bankruptcy is not a choice you make, but others make it for you. There are two forms of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. The greatest majority of bankruptcy legal proceedings are of the voluntary variety, but even famous, rich, and powerful people can be forced into bankruptcy if they cannot pay their creditors on time, regardless of the reason.

There are basically two types of bankruptcies an individual can file- a chapter 7 or a chapter 13. A Chapter 7, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A chapter 13 bankruptcy is the second bankruptcy available to individuals and is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. If you have an income and qualify for a chapter 13, there are certain advantages for filing one. These advantages are: to save your home from foreclosure; to reschedule secured debts; to provide protection for co-debtors; to consolidate your loans under one plan; to keep non-exempt property; to extend certain tax obligations, student loans, or other such qualifying debts; and to qualify for bankruptcy relief. Filing a chapter 7 will not afford you these various opportunities listed. So, if you have assets you want to keep, you currently have an income, and you want to try to pay your creditors as much as what is reasonable, you may want to consider filing a chapter 13 bankruptcy. But, if you do not have many assets, you do not have a mortgage, you just want to get out from under the burden of your debts, and you qualify, you may want to consider filing a chapter 7 bankruptcy.

Choosing the appropriate bankruptcy to file can be a complicated and tricky process. Common sense  indicates you will need a bankruptcy lawyer in order to properly understand how these complex laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan areas of Minneapolis or St. Paul, Minnesota, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

What Do UFOs, a Governorship, Bankruptcy, Fraud, and Bill Clinton Have in Common?

John Fife Symington III was the 19th Governor of Arizona from 1991 until his resignation in 1997. Symington, in 2007, admitted to witnessing the famous 1997 Phoenix Lights UFO event while still Governor at the time. As Governor, he downplayed the event explaining later he did so to avoid public panic. Two years prior to his resignation as Governor, Symington filed a personal chapter 7 bankruptcy while still occupying the seat of Governor. According to news articles of the day, he claimed $24 million dollars in debts and $61,000 in assets. The debts were reportedly the result of  his involvement in the development of a shopping center and other real estate deals. Stemming from loans secured in the 1980s and early 1990s for his business ventures, Symington was indicted on charges of extortion, making false financial statements, and of bank fraud. He was convicted of bank fraud in 1997, and since Arizona state law does not allow convicted felons to hold office, he resigned his office. So, what does UFOs, a governorship, bankruptcy, fraud, and Bill Clinton have in common? John Fife Symington III. The controversial Governor was pardoned for his offenses by President Bill Clinton in 2001.

Controversy is no stranger to bankruptcy, a legal proceeding that was designed to allow the honest person to work their way out of a bad financial situation. Whether or not former Governor Symington was an honest of dishonest person is not really the point of this narrative. The point of using him as an illustration is to show that bankruptcy is no respecter of persons. It can happen to the famous, rich, or even public office holders. If it can happen to them, it can also happen to you.

There are basically two forms of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. In the case of Symington, one of his creditors who were financing the development of the shopping mall forced him into bankruptcy with foreclosure on the loan. The greatest majority of bankruptcy legal proceedings are of the voluntary variety. Even famous people like Symington can be forced into bankruptcy if they cannot pay their creditors on time, regardless of the reason.

As a society, we have come a long way since the days of debtor prisons and states. Our Constitution provided for our protection against unfair creditor practices when it gave Congress the power to legislate bankruptcy law. Today, the primary laws governing bankruptcy are federal. State laws supplement the federal laws by honing out some of the necessary details.

There are basically two types of bankruptcies an individual can file- a chapter 7 or a chapter 13. A Chapter 7, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A chapter 13 bankruptcy is the second bankruptcy available to individuals and is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts.

If you have an income and qualify for a chapter 13, there are certain advantages for filing one. These advantages are: to save your home from foreclosure; to reschedule secured debts; to provide protection for co-debtors; to consolidate your loans under one plan; to keep non-exempt property; to extend certain tax obligations, student loans, or other such qualifying debts; and to qualify for bankruptcy relief. Filing a chapter 7 will not afford you these various opportunities listed. So, if you have assets you want to keep, you currently have an income, and you want to try to pay your creditors as much as what is reasonable, you may want to consider filing a chapter 13 bankruptcy. But, if you do not have many assets, you do not have a mortgage, you just want to get out from under the burden of your debts, and you qualify, you may want to consider filing a chapter 7 bankruptcy.

You do not need to be Governor, see a UFO,  be accused of fraud, or be pardoned by the President to determine whether or not you are in financial trouble. What you might need is help in determining whether you should file a bankruptcy or to choose the appropriate bankruptcy to file. Common sense  indicates you will need a bankruptcy lawyer in order to properly understand how these complex laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Tuscon, Arizona, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

Life Goes On For Dorothy Hamill After Bankruptcy

Dorothy Hamill, 1976 US Gold Medal Olympic Cha...
Image via Wikipedia

Born to Chalmers and Carol Hamill of Chicago, Illinois in July of 1956, Dorothy Hamill was destined for ice skating greatness. She eventually became the 1976 National, World and Olympic champion, but   moved on after that to the Ice Capades where she was a headliner from 1977–1984. Due to competition and changing national tastes in entertainment, the Ice Capades eventually folded. Hamill bought the financially strapped company’s assets in 1993 in an effort to revive its earlier successes, but facing tough competition from Walt Disney’s World on Ice, she was forced to sell the Ice Capades in 1995. By 1996 after taking a beating on the Ice Capades and now facing a divorce, Hamill had to file for bankruptcy. After the bankruptcy, Hamill continued to skate in shows including a regular stint with Broadway on Ice. Hamill has been a mentor to 2008 World Junior Champion and two-time U.S. Championship silver medalist Rachael Flatt who competed in the 2010 Olympic Winter Games.

During an interview with Al Michaels of NBC on February 23, 2010, Hamill stated that she had gotten married again. So, even for famous Chicagoans, life does go on after bankruptcy.

There are basically two types of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. The greatest majority of bankruptcy legal proceedings are of the voluntary variety. Even famous people like Dorothy Hamill can be forced into bankruptcy if they cannot pay their creditors on time, regardless of the reason. Bankruptcy is a legal proceeding that was designed to allow the honest person to work their way out of a bad financial situation. As a society, we have come a long way since the days of debtor prisons and states. Our Constitution provided for our protection against those antiquated ways when it gave Congress the power to legislate bankruptcy law. Today, the primary laws governing bankruptcy are federal. State laws supplement the federal laws by honing out some of the necessary details. The laws have been designed to protect both creditor and debtor.

There are basically two types of bankruptcies an individual can file- a chapter 7 or a chapter 13. A Chapter 7, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A chapter 13 bankruptcy is the second bankruptcy available to individuals and is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts.

If you have an income and qualify for a chapter 13, there are certain advantages for filing one. These advantages are: to save your home from foreclosure; to reschedule secured debts; to provide protection for co-debtors; to consolidate your loans under one plan; to keep non-exempt property; to extend certain tax obligations, student loans, or other such qualifying debts; and to qualify for bankruptcy relief. Filing a chapter 7 will not afford you these various opportunities listed. So, if you have assets you want to keep, you currently have an income, and you want to try to pay your creditors as much as what is reasonable, you may want to consider filing a chapter 13 bankruptcy. But, if you do not have many assets, you do not have a mortgage, you just want to get out from under the burden of your debts, and you qualify, you may want to consider filing a chapter 7 bankruptcy.

When a divorce occurs with an ill timed business investment, it becomes  a good recipe for bankruptcy, and when you have found yourself in a situation similar to what Dorothy Hamill experienced in her life,  you may want to consider filing for a voluntary bankruptcy. Bankruptcy can happen to a famous person, and it can happen to you. If this is the case, please consider allowing a bankruptcy lawyer to properly help you understand how these complex laws may apply in your situation. If you feel you have been almost forced into bankruptcy, and you live in or around Chicago, Illinois, contact us today and we will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.