You can blame fame and fortune at an early age, you can blame not knowing how to handle money, and you can blame the celebrity bubble, but in the end a celebrity bankruptcy comes down to the money not lasting forever. Health can also play a factor, and when Cassidy made the recent announcement of his retirement from touring, his health was a factor in the decision. He also notes that the royalties which once supported a lifestyle that boasted $27,000 a month in expenses dropped to income of around $12,000. The drop in income, a run of bad investments, and a lavish mansion’s expenses, taxes, and upkeep made bankruptcy the only option.
Better Off than Some
Despite getting to a point where he had just about $400 in the bank, David Cassidy is actually in a better spot than many who enter bankruptcy. He has assets that exceed his debts, and is working through a Chapter 11 reorganization that admits to $2.1 million in debts, but lists $3.7 million in assets. The trustee will help him to reorganize and settle his debts, and shed some of the bad investments. He will exit bankruptcy with his debts discharged and at least some financial security, though his $3 million dollar mansion will go on the block. He’ll have to be frugal, and stick to a budget, but with some sound financial advice and counseling he should be in pretty good shape.
Bust a Myth
You do not have to be underwater with debts to assets ratios in order to file for bankruptcy. You can still have income and assets, but not be able to keep up with your debts and expenses. That is the only qualification for filing for reorganization under a Chapter 11 or 13 bankruptcy. In the case of a Chapter 7, or a liquidation bankruptcy, you will need to pass a means test in order to file, and all but your exempt assets will be liquidated to satisfy your creditors. If you think that you are approaching the point where your income is not keeping up with the outgo, you owe it to yourself to consider bankruptcy before your situation does put you underwater with your assets versus your debts. This way you can exit a reorganization bankruptcy with your debts discharged, and still have some assets and cash on hand.
Get Good Advice
Bankruptcy law is a specialty practice for reason. Bankruptcy laws at the federal and state level are very complex, and need an expert hand. While a number of people use bankruptcy preparers, paralegals, or even DIY, only an attorney can provide you with legal advice. For a complex filing, and a good outcome, you should give us a call and set up a free initial consultation. Our offices in Fort Lauderdale and West Palm Beach are open seven days a week. Give us a call and let’s get to work on getting your financial ship righted and sailing again.