Recently in Celebrity Bankruptcy Category

Los Angeles Bankruptcy Dismissal Risk Factors

February 14, 2014,

It was recently reported by celebrity news sites that former "Baywatch" star Nicole Eggert was filing for a Los Angeles bankruptcy - for the third time in less than a year.
nosymbolcircle.jpg
The most recent attempt reportedly followed two previous efforts that were dismissed by the bankruptcy court. While we aren't privy to all the details of the prior rulings, we do know that Eggert had tried before to file for a Chapter 7 liquidation bankruptcy. This time, she is filing for a Chapter 13 repayment plan.

Bankruptcy laws changed dramatically in 2005, making it more complex to qualify for a Chapter 7 bankruptcy, which allows filers to walk away virtually debt-free.

Continue reading "Los Angeles Bankruptcy Dismissal Risk Factors " »

Filing for L.A. Bankruptcy to Cope With Tax Debt

April 13, 2013,

Dionne Warwick may be saying a little prayer - for her bank account. For the rest of us, it's time to deal with the annual tax deadline.

microphone3.jpg
The Rolling Stone reports the 72-year-old singer filed Chapter 7 bankruptcy in order to settle years-old tax issues dating back more than 15 years ago.

Our Los Angeles Chapter 7 bankruptcy lawyers know that while most tax debts can't be discharged in a bankruptcy, some can. As we approach the April 15 deadline to file your 2012 taxes, it's an appropriate time to discuss the differences.

It's worth noting first of all that if you file for a Chapter 13 repayment plan, you'll end up repaying your tax debts in full over a period of time as part of the repayment plan. A Chapter 7 is the only way you can fully discharge your tax debts, but you can only do so if a number of criteria are met.

Those are as follows:


  • The taxes you owe are income taxes. Unfortunately, other forms of taxation, such as payroll taxes or fraud penalties, can't be eliminated no matter what kind of filing you choose.

  • You did not commit willful evasion or tax fraud. That is, you didn't try to evade paying your taxes or file a fraudulent return or use a false Social Security number, etc.

  • Your debt is a minimum of three years-old.

  • You have filed a tax return, and you have to have done it at least two years prior to filling.

  • Your income tax debt was assessed by the IRS at least 240 days prior to your filing or has not yet been assessed.


An experienced bankruptcy lawyer can help you determine if your situation meets all the above criteria and if not, whether there is any action you may be able to take to change the situation.

In Warwick's case, her attorney told Rolling Stone that her tax troubles stemmed from mismanagement of funds by a business manager who had been fired a number of years ago. While Warwick had trusted this individual to appropriately handle her finances, at the end of the day, it is she who is responsible for the outcome.

Warwick had reportedly been attempting to hammer out a deal with the IRS for the last several years. Her attorney said that while she continued to pay the IRS, the money she handed over was only applied to the interest and penalties, as opposed to the actual principal amount.

Her total liability was calculated at $1 million. While she's paid about $1.3 million, her attorney says, the interest and penalties have resulted in a situation where she has been unable to keep up with the payments.

At her age, she is not bringing in enough in performances to cover the cost of her expenses plus the amount demanded in back taxes. Although the IRS is going after her hard as a "celebrity," her attorneys says her ability to pay is severely limited. Her average monthly income is somewhere around $20,950, while her expenses tally up to $20,940 - meaning she makes a net income of $10. This isn't necessarily unusual with celebrities or even wealthy individuals.

Warwick has completed the required credit counseling.

Reports indicated that while her credit would be damaged at least initially, it's believed most of her assets would be protected under the filing.

Continue reading "Filing for L.A. Bankruptcy to Cope With Tax Debt " »

"Octomom's" Los Angeles Bankruptcy Tossed for Improper Filing

May 24, 2012,

Los Angeles bankruptcy attorneys know that the whole process of filing for a bankruptcy in L.A. can be intimidating and complex. babyhand.jpg

There is a lot of specific paperwork that has to be filed in a very specific way. It has to all be done according to set deadlines, and the wording has to be exact in order for you to get the most out of it - and prevent the case from being tossed.

That's apparently what happened with Nadya Suleman, better known as "Octomom." As the single mother of 15 children, she has been fighting to stave off foreclosure of her home in La Habra. To do so, she filed a Chapter 7 bankruptcy.

First of all, what's important to note is that for someone who is trying to keep their home, Chapter 7 may not be the best option. That's because this type of bankruptcy seeks to liquidate almost all assets and erase the debt (or the debt that is eligible, anyway).

A better option for someone trying to hang onto their house might be Chapter 13, which is essentially a payment plan that will allow you to keep more of your assets. This is particularly true if equity remains.

Secondly, Suleman apparently tried to save money by filing for the bankruptcy herself. Now on the surface, this might seem like a smart thing to do, right? Bankruptcies are going to cost you up-front, out-of-pocket. If you're already broke, who can afford the extra expense?

The problem is that if you don't file it properly, not only is the bankruptcy likely to be thrown out (which means you've wasted all that time anyway), it's also possible that you may be barred from re-filing for a certain period of time. That means you could be stuck without relief for even longer.

Hiring an experienced Los Angeles bankruptcy attorney is critical.

Suleman reportedly did not include a number of important financial documents that the bankruptcy judge required of her in order to complete the case. The judge indicated that she had time to fix these errors, however did not.

For her, the fact that the bankruptcy has been thrown out also means that the foreclosure of her home may proceed. While a Chapter 7 bankruptcy may not have protected her home in the long-term, it would have bought her some time through what's called an Automatic Stay. The bank wouldn't have been able to act for at least three or four months, giving her some time to figure out what her next move should be.

Her case is somewhat extreme, given that she reports some $1 million in unpaid loans and names more than 20 creditors whom she can't repay. Additionally, she is not able to maintain the payments of her mortgage, her children's tuition or even electric or water bills.

Of course, it does seem everyone is struggling these days. A Los Angeles bankruptcy can help provide a fresh start - assuming you do it right and seek help in filing.

Continue reading ""Octomom's" Los Angeles Bankruptcy Tossed for Improper Filing " »

"Jerry Maguire" Agent Files For Celebrity Bankruptcy in Los Angeles

January 19, 2012,

The sports agent whose life inspired the Tom Cruise character for the hit movie "Jerry Maguire" recently filed for bankruptcy in Los Angeles, showing that celebrities and anyone else can use these laws to their advantage.

What this story shows is that sometimes it's not job loss, medical bills or credit cards that lead to financial problems, but also dependency issues. A recent story from the Associated Press looks at Leigh Steinberg's recent struggles, which show that a life of alcoholism, especially following divorce, can create financial issues so deep that bankruptcy is a sound solution.
1345669_sunset_in_venice_beach.jpg
Our Los Angeles bankruptcy lawyers have seen many celebrities dip into foreclosure, lose money on major investments and feel the same effects of the poor economy that every else does. Simply being in a different tax bracket doesn't mean celebrities are immune to the same problems.

The article reports that he would sit in his balcony overlooking Newport Bay drinking. He'd do it in bed and before driving. He even got arrested after people reported he was screaming and running around drunk in public in upscale Newport Beach.

The news article goes on to state that he secured major contracts for big-name, NFL Hall of Fame players, was on the cutting edge of voiding years in contracts, securing big signing bonuses and estimates state he earned more than $100 million in his career.

But he recently decided to use the protection of bankruptcy in Los Angeles to his advantage, listing that he has nearly $500,000 in assets, but more than $3.1 million in debt. The paperwork currently shows he has a monthly net income of $3.33 million, yet owes millions in back rent and owes players, coaches and taxes.

He said recently that he has been sober for nearly two years, but the problems from two years ago have caused him to run into massive debt. Major medical bills, a divorce, problems with flooding and mold at houses he owned and bad investments also crushed his money situation.

He said he would drink at big gatherings, Super Bowl parties and other galas, just like everyone else. But as the drinking increased, he got into debt and that debt led to legal problems and default judgments. He later lost his job after a lawsuit was filed against him for a debt and now he can't work in football, his most successful sport.

Alcoholism and dependence on drugs can lead to major money issues when the need for that outweighs others. That can get expensive, which can create more and more financial issues.

Bankruptcy in Los Angeles may be a way out of these issues. If a consumer owes people, companies or banks major dollars, but their income is lagging, bankruptcy may help. Instead of losing court battles and getting further into trouble, filing for bankruptcy can help people get out of the debt and figure out a way to battle back in the future.

Why wait and hope that the situation improves without any major planning? Take the proactive approach and set up a free consultation with an experienced Los Angeles bankruptcy lawyer today.

Continue reading ""Jerry Maguire" Agent Files For Celebrity Bankruptcy in Los Angeles " »

Hollywood Stars Not Immune From Foreclosure and Los Angeles Bankruptcy Can Help

July 19, 2011,

Many celebrities have been in the news lately because they have had to file for bankruptcy or because a home they own has ended up in foreclosure.

Many people in the public would assume that a celebrity losing a mansion to foreclosure is a sure sign of mismanaged funds, but that's not always the case. If a neighbor loses their home to foreclosure, you may not assume the same thing. Job loss, medical bills that can cost hundreds of thousands of dollars and credit card debt are the top three contributors to bankruptcy filings in the United States. More and more often, people are finding themselves in serious trouble because of bad real estate debt.
hollywood.jpg
And Hollywood isn't immune. There have been many celebrities and public figures who have used bankruptcy laws to their advantage. Celebrity bankruptcies range from Willie Nelson to Donald Trump to Thomas Jefferson. The laws are designed to help consumers get back on track financially and that includes when a foreclosure is in the works.

According to a recent article in Business Insider, there have been several celebrities who have had a house foreclosed on in 2011.

Mel Gibson: He has already sold two properties for well below the list price and may be losing several other properties, including his church and home in Malibu. He was sued by a construction company for $12,000.

Nicholas Cage: The actor lost his Los Angeles home to foreclosure in the last year. He bought the house for $6.5 million in 1998 and after putting in renovation work, tried to sell it for $35 million in 2006. Unable to sell, the house went into foreclosure in 2010 and failed at auction in April. the property is on the market for $10.5 million, well below the 2006 asking price.

Octomom Nadya Suelman, who gave birth to octuplets and starred in a reality television show, has been delinquent on mortgage payments several times and recently the bank went forward with foreclosure. Her father bought her a $565,000 house in 2009, but she has been served with eviction papers on the La Habra house.

Actor Timothy Busfield, best known for his role on The West Wing and Thirtysomething bought his Malibu home for $1.2 million in 2003 and after a divorce put it up for sale in 2008 at $2 million. After delinquent payments, the foreclosure process began and eventually he lost his home.

When someone files for Chapter 13 bankruptcy in Los Angeles, creditors must stop calling and a foreclosure, however far into the process it is, stops immediately. Los Angeles Bankruptcy Lawyers have helped many people save their homes through use of the bankruptcy laws.

Chapter 13 requires setting up a reasonable payment plan over three to five years that allows creditors to get a portion of the money back that the consumer owes. But, it also would be a significantly lower payment than what the consumer currently is paying to collection agencies and lenders.

Chapter 7 is slightly different, but is the most popular form of bankruptcy. Nearly 70 percent of bankruptcy filers use this chapter of the bankruptcy code, which essentially provides a fresh start to consumers who have a large amount of debt.

Continue reading "Hollywood Stars Not Immune From Foreclosure and Los Angeles Bankruptcy Can Help " »

Lenny Dykstra Case Shows Los Angeles Bankruptcy Risks

May 12, 2011,

Former major league All-Star outfielder Lenny Dykstra was recently indicted on bankruptcy fraud charges, alleging that he sold items from his $18 million mansion in Ventura County, CNN reports.

Los Angeles Bankruptcy Attorneys work with people who are desperate to put an end to nagging creditor calls and get back on track. Successfully filing bankruptcy and following the laws in place can be highly beneficial to getting people out of debt. Indeed, it can be a new lease on life.
bankruptcy.jpg
But Bankruptcy fraud is a serious crime and in Dykstra's case, he faces 13 federal charges that could put him in prison for up to 80 years. Along with bankruptcy fraud, he is charged with obstruction of justice, concealing property from the bankruptcy estate, embezzlement and making false declarations to bankruptcy court.

Bankruptcy fraud most often occurs when someone is accused of trying to hide assets. When people file for bankruptcy in California, it means they have to be truthful about all of their assets. Trying to sell off assets outside of the proceedings can lead to criminal charges and serious prison time.

But the reverse is also a danger. If you don't list all of your debts, you could still be responsible for those debts and may not be able to seek bankruptcy protection for years after filing. In some cases, the failure to include assets is a simple oversight. Still, the government may come after you with criminal charges.

In Dykstra's case, the 48-year-old from Murrieta allegedly stripped his Thousand Oaks mansion and denied receiving money for having sold items that were owned by the bankruptcy estate. CNN reports that gold- and silver-plated door knobs, fixtures, furniture, artwork and sports memorabilia was taken and sold.

Californians have different options when considering bankruptcy. It's possible that Chapter 7 bankruptcy is better for you. It's also possible that Chapter 13 bankruptcy in California best suits your financial situation.

You should consult an experienced bankruptcy attorney in Encino, Glendale or Los Angeles to consider the options. Trust someone who has been helping people climb out of debt for more than a decade.

Continue reading "Lenny Dykstra Case Shows Los Angeles Bankruptcy Risks " »

How Donald Trump Filed for Bankruptcy Four Times and Survived

May 10, 2011,

Forbes Magazine recently reported that multi-billionaire Donald Trump has filed for corporate bankruptcy four times in the last two decades.

The story of Trump, a real estate and development mogul, TV star and potential U.S. President candidate, shows why having an experienced Los Angeles bankruptcy attorney is important to dealing with financial challenges -- whether in business or in your personal life.

Trump filed for corporate bankruptcy in 1991, 1992, 2004 and 2009 because his casino and hotel properties in Atlantic City were over-leveraged.Trump Entertainment Resorts operates the Taj Mahal, Trump Plaza and Trump Marina. He has never filed for personal bankruptcy, Forbes reports, which is key in his ability to emerge relatively unscathed financially.
bankruptcy.jpg
The magazine reports that in the 1990s, Trump used his own wealth to guarantee payment of bonds and interest, causing him to have to sell his Trump Princess yacht, Trump Shuttle airline and his stake in other businesses to pay off about $900 million in personal debt.

Trump has said he was able to use the country's bankruptcy laws to his advantage to restructure debt, free up capital and improve his businesses, just as many successful business owners have done. Trump isn't the only celebrity to use Chapter 11 bankruptcy laws to his advantage.

In fact, many actors, athletes and even a U.S. President have used the law to reorganize their finances. The list includes singer Willie Nelson, boxer and entrepreneur George Foreman and President Thomas Jefferson.

Bankruptcy in California isn't a one-size-fits-all solution. Bankruptcy can be used by businesses as well as individuals and can be used to save your home from foreclosure or buy time to pay off expensive bills or credit card debt.

Continue reading "How Donald Trump Filed for Bankruptcy Four Times and Survived " »