Rapper 50 Cent has just filed for Chapter 11 bankruptcy protection in a Connecticut court under his real name ‘Curtis Jackson’. This filing comes days after a court-ordered the rapper to pay $5 million to Levonia Leviston. Jackson allegedly leaked a sex tape featuring Leviston.
Taking Necessary Precautions
Jackson told the press that he was taking the same “necessary precautions” like any other “good businessman.” He went on to cite others that have filed Chapter 11 including Donald Trump and Walt Disney. This filing will give the rapper time to restructure his assets while also keeping creditors at bay. Jackson claims that his filing had more to do with personal debt than the sex tape scandal. His assets and debts are currently in the $10 million to $50 million dollar range.
Filing for Chapter 11 is different than when an individual file for personal bankruptcy under Chapter 7 or 13. What does this filing mean for 50 Cent? He can legally put debt collections on hold while also using his assets. Filing for Chapter 11 does not mean that Jackson will no longer be able to pursue his career as a rapper. As Jackson’s lawyer has stated, “...the personal bankruptcy protection permits [him] to continue his...work as an entertainer.” He can do all of this while reorganizing his financial affairs.
Regardless of whether or not Jackson’s filing will be challenged by one or more of his creditors, the fact remains that filing for Chapter 11 will prevent collection activities and protect his assets.
In the Big League
Can you file for Chapter 11 the same way that 50 Cent and Donald Trump's business entities have done? Or, is this limited to large celebrity brands and personalities? While each state varies as far as what you can and cannot claim as exempt when it comes to Chapter 11, this form of bankruptcy does allow for restructuring whether you are running a small company or a larger one.
Chapter 11 is often the only way to protect assets when it comes to a large amount of debt. When you have a brand to protect that’s as big as 50 Cent’s and Donald Trump's, there are bound to be more people after some of your assets - but that doesn’t mean that you can’t claim the same form of bankruptcy protection if you aren’t an international personality. What this does mean is that you may not have the same legal team setup, so filing might be a bit more difficult.
Keeping Your Assets Separate
If you run a business of any kind, it’s vital that you keep your business life and your personal life entirely separate. This way, you will not lose all of your personal assets if your business is sued for any reason. Setting up the paperwork for this and for filing for Chapter 11 can be tricky, though, and that’s why personalities like 50 Cent and Donald Trump have large legal teams. As 50 Cent put it when speaking with the press recently, “I gotta [sic] decent legal team. You don’t have to worry about me.
Do you have a decent legal team? Do you have someone that can file the paperwork for you if you do need to file for Chapter 11 bankruptcy? No matter what your situation might be, having an experienced bankruptcy lawyer on your side is invaluable. If you are facing a lawsuit of any kind, don’t go it alone. Call us for your FREE Case Evaluation Today (800) 391-4337 or schedule online.