When New York consumers are considering filing for Chapter 7 bankruptcy, it is important that they understand how this process works to determine if it is right for them. This type of bankruptcy can eliminate debts, but not all debts are eligible for discharge. Additionally, depending on someone's circumstances, bankruptcy may not be granted to them or may not be the best course of action.
Celebrity bankruptcies
Many New York residents who become overwhelmed by debt decide to file for bankruptcy. Even people who have earned millions of dollars can sometimes find themselves in a financial mess that they need help extricating themselves from. It was recently reported that rapper 50 Cent, who had once been worth about $155 million, filed for Chapter 11 bankruptcy protection.
Rapper 50 Cent files for individual Chapter 11 bankruptcy
New York residents may have read that the hip-hop star Curtis James Jackson III, who is better known by the stage name 50 Cent, filed for bankruptcy on July 13. While stories about wealthy celebrities running into financial problems are not uncommon, some observers are surprised that the famous rapper has chosen to file for Chapter 11 rather than a Chapter 7 bankruptcy. Chapter 11 bankruptcies are usually filed by businesses seeking to reorganize their debt, but they may be filed by individuals in certain situations.
Liquidating business assets
Liquidating assets in a sale can sometimes be the smartest move for a business owner in New York who is no longer making money. When a business is not turning a profit, selling the business may not be possible because there may be no interested buyers. Before liquidating assets to get out of a business, it is important for a business owner to work out a plan.
Music producer Scott Storch files for bankruptcy
New York-born music producer Scott Storch filed a Chapter 7 bankruptcy petition in June after spending a $70 million fortune on private jet flights, real estate, jewelry, cars and cocaine. The 41-year-old previously filed for Chapter 13 bankruptcy in 2009 after he spent about $30 million in three years. At the time of his Chapter 7 bankruptcy filing, Storch claimed that all he owned was $100 in cash, a $3,000 watch and $500 worth of clothing. His debt was valued at almost $4.4 million.
