New York fans of the rapper Tyga may be surprised to learn that in December 2010, he filed for Chapter 13 bankruptcy. At the time, he said that he owed between $100,000 and $500,000 but that his assets amounted to no more than $50,000. Although in 2007 Tyga signed a record contract, he had not yet released an album at the time of his filing.
Tyga only listed one debt in his filing. A landlord had sued him for possession of a home, and when Tyga failed to appear in court, the landlord was awarded more than $88,000. Tyga accumulated an additional $35,000 in interest over the next few years. In 2015, he paid off the debt.
This was not Tyga’s only conflict with a landlord. Several have filed lawsuits against him alleging that he did not pay rent or that he did not move out when asked to do so.
Unlike Chapter 7 bankruptcy, where a debtor’s non-exempt assets are liquidated with the proceeds used to pay off creditors, Chapter 13 bankruptcy allows people to set up a three- to five-year court-approved repayment plan. Many people think that filing for bankruptcy means losing everything, but this is not always the case. Chapter 13 can allow some debtors to avoid a foreclosure on their home, for example. Filing for bankruptcy can be complex, and there can be a number of other debt relief options available. Chapter 13 is designed for consumer debtors who have a fairly reliable source of income, and there are other eligibility requirements that a bankruptcy attorney can outline.
Source: Electronic Urban Report, “Secret Chapter 13 filing puts Tyga in bankrupt mode,” Feb. 8, 2016