Daily Archives: February 18, 2016

Is Bankruptcy Involuntary Servitude?

Is Bankruptcy Involuntary Servitude? IS BANKRUPTCY INDENTURED SERVITUDE

Rapper 50 Cents says yes.

Which is curious, as he filed his own

bankruptcy case.

So it was, well, you know, voluntary.

An involuntary bankruptcy case can be filed against a person or company.

But you better be right, or you can be ordered to pay the costs of the person or company you filed against.

You have to be a legitimate creditor, and get others to join you, to file a bankruptcy petition to put someone else in bankruptcy.

Now, if that person could be forced to work to pay you, then bankruptcy would be involuntary servitude.

But our rapper friend filed, voluntarily, a Chapter 11, which calls for a repayment plan.

He could not file a Chapter 13 bankruptcy, because there is a debt limit and he is WAY over that.

Because he owes over $29 million dollars, just to his two largest unsecured creditors.

Actually, it was not the rapper himself, but his bankruptcy attorneys, who made the statement.

(From the Market Watch story linked to above)

“The plan violates the Thirteenth Amendment’s prohibition on involuntary servitude,” his lawyers said in a 30-page court filing. “Both Congress and the United States Supreme Court recognize that, by requiring an individual debtor to commit future earnings to the funding of a plan, [the bankruptcy law could] run afoul of the constitutional prohibitions on peonage and indentured servitude.”

The 13th Amendment was enacted to outlaw slavery.

Now, Chapter 13, and individual Chapter 11 cases, require all disposable income of the debtor, the person filing, to be committed to the plan for 3 or five years.

So, the argument makes no sense to me.

Now, the Chapter 11 plan to which his lawyers object, was filed by his creditors.

One of the problems the creditors have is the pictures, like the one above, which the bankruptcy Mr. Jackson posted of himself.  Can’t say that I blame them.

Now, he rushed into bankruptcy court after losing a lawsuit.

He can file his own Chapter 11 plan, in Chapter 11 bankruptcy, there can be competing plans filed, and the Judge determines which, if any, is confirmed.

Stay tuned.

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