Being in control of high assets does not necessarily preclude the need for bankruptcy protection. If the sum of your debts matches the sum of your assets, then you may need to look into whether you qualify for Chapter 7, Chapter 13 or Chapter 11 bankruptcy.
With that in mind, consider the recent Chapter 11 filing by Curtis Jackson — better known as hip-hop mogul and entrepreneur 50 Cent. In early 2015, the rapper’s net worth was estimated to be about $155 million, but according to his bankruptcy filing, 50’s assets come to about $50 million, as do his liabilities.
Earlier this year, 50’s boxing promotion company also filed for bankruptcy, and a judge recently ordered the rapper to pay $5 million to settle an invasion-of-privacy lawsuit. These losses have likely factored into his Chapter 11 filing.
Individuals and businesses that have very heavy debts may not qualify for Chapter 7 or Chapter 13 bankruptcy. In such a case, the right move may be to develop a plan for reorganizing your company or personal finances through Chapter 11, which allows for debts to be discharged or settled.
The reality is that business owners take risks, and often the life of a business has many ups and downs. One important aspect of the United States Bankruptcy Code is that it offers protections to businesses that find themselves in financial dire straights.
If you and your company are carrying heavy debt, then don’t hesitate to explore the available legal options for saving the business and guarding against personal liability.