Bankruptcy Budgets

I like to blog about celebrity bankruptcies, as a starting  BKbudgetpoint for discussing more general bankruptcy issues.

50 Cent, a/k/a Curtis Jackson, jumped into bankruptcy court after a big judgment was entered against him.

Nothing original about that.

But, his monthly bankruptcy budget of living expenses is unrecognizable to most of us.

monthly expenses for the Power actor include $72,000 a month for his 50 room mansion, including utilities, mortgage, property tax and insurance. Additionally, Jackson spends $9,000 for security, $5,000 for gardening, $1,000 for grooming and another $3,000 in wardrobe per month.(People magazine)

Well, not sure what that $72,000 is.

I guess if you have a 50 room mansion, you need $9,000 per month for security for it.

Gardening?

Just how big is that garden?

Doesn’t the TV show provide work clothes?

And a well groomed star he is.

Though, apparently, a little behind in paying his barber, not to mention, his stylist.

Despite spending $3,000 a month on his wardrobe, 50 owes his stylist, Erin McSherry, $5,245 in back pay according to the filing. The document also includes unspecified amounts owed to his barber and personal trainer.

I wonder how much time is covered by the $5,245 in back pay.  A month?  A week?

He filed a repayment plan bankruptcy, Chapter 11, because he is over the debt limit for Chapter 13.

In a Chapter 13 bankruptcy, the budget determines how much you pay.  Whatever is left has to go to the trustee for the benefit of your creditors.

There are other tests for confirming a Chapter 13 plan, but any Chapter 13 trustee would object to these monthly expenses as unreasonable.

No reason to keep paying a barber that much money, if you do not have enough dollars to pay your creditors.

In a Chapter 7 bankruptcy, the U. S. Trustee looks at the income and living expenses, to see if they have grounds to object to the case as a substantial abuse of Chapter 7.

These objections, filed as motions to dismiss the Chapter 7 bankruptcy, can be resolved by converting to a

Chapter 13 bankruptcy, a payment plan.

Before considering any bankruptcy option, it is ALWAYS best to come up with an accurate budget of your monthly income and living expenses.

Which will not look like the one 50 Cent filed.

 

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