Although many New York residents may be familiar with Tori Spelling's acting career, they may not be quite as familiar with the reported financial challenges faced by her and her husband, 49-year-old Dean McDermott. The actress reportedly went through a physically and financially challenging time in the summer of 2015, which included hospitalization and significant pain that kept her from working. Now, she faces a lawsuit from American Express, a company to which she reportedly owes approximately $40,000. Because of the financial pressures, Spelling's husband is apparently requesting that she declare bankruptcy.
One of the reported reasons for McDermott's concern is that American Express may be only one of many companies that could take legal action to recover outstanding debts that are owed. However, reports also indicate that Spelling is unlikely to proceed with bankruptcy action because she has an extensive collection of memorabilia that could be at risk in such a scenario. The storage costs for these items could be a contributing factor to the amount of debt owed, and legal action against the actress could put that collection at risk anyway.
Options available for personal bankruptcy include Chapter 7 or Chapter 13. In Chapter 7, an individual or couple would be required to liquidate non-exempt assets to satisfy creditors to whatever extent possible. However, Chapter 7 is limited to those who meet a means test related to income levels. A Chapter 13 bankruptcy is more of a restructuring approach to debt that provides an opportunity for an individual or couple to catch up on payments that are past due over a period of three to five years pursuant to a court-approved plan.
People who are unsure of what option is available for their situation might begin by discussing their concerns with a bankruptcy lawyer. Financial counseling is typically required before bankruptcy action can be initiated, and a lawyer or counselor can often suggest other forms of debt relief that may be more appropriate.