A lot of people go through financial challenges at one point or another. The situation can seem hopeless when faced with crippling debt. The ominous prospect of losing everything is never far from your mind. You do not have to lose your dignity to creditors though. Bankruptcy provides a vital lifeline for many struggling Americans. It is a way of discharging debt or coming up with a repayment plan so you can pay it back over a convenient period. Well-known singer Dionne Warwick was recently saved from the wrath of the taxman by the bankruptcy court.
The star had accumulated a tax debt of over $10 million. Some of her debt dated as far back as 1991. A bankruptcy trustee recently filed a request to excuse Warwick from paying off her bill. In the document, she asked to be allowed to keep some of her personal assets. These included her fur coats, diamond earrings, furniture and artwork. She also asked to keep $1000 in cash.
There are different types of bankruptcy. Some of them are Chapter 7, Chapter 11 and Chapter 13 bankruptcies. Various factors determine which type of bankruptcy the law allows you to use, and which is the best resolution for your situation. These factors can include the kind of debt and assets you have as well as income.
Bankruptcy law is complicated. Be wary of people offering quick fixes to your debt problems. They may try to take advantage of your vulnerability. Whether you are an accomplished celebrity or an average New Jersey resident, seeking legal advice can help you understand the bankruptcy process better should you face those circumstances.
Source: The Independent, “Dionne Warwick excused from paying back debts after racking up more than $10m in unpaid taxes,” Jenn Shelby, March 19, 2014