Rapper’s proposed repayment plan is unusual and should not scare you off from considering bankrupcty
50 Cent’s finances are making headlines again after the rapper, aka Curtis Jackson, tried to equate his proposed bankruptcy repayment plan with “indentured servitude.” But before you let this statement frighten you away from the considerable debt relief offered through Chapter 13 and Chapter 11 bankruptcy repayment plans, it is important to understand that Jackson’s proposed repayment plan is indeed out of the ordinary.
How Repayment Plans Should Work
Normally, when filing for Chapter 13 (for a personal bankruptcy) or Chapter 11 (for a small business bankruptcy), the entire point is to have the bankruptcy court approve a repayment plan that will allow you to pay off a portion of the debt over a 3 to 5 year period. This repayment plan allows you to make one consolidated payment per month that will then be distributed to your various creditors according to the court’s decision. You and your bankruptcy attorney get to calculate the amount of this monthly payment based on your priority debts, your income, and your expenses, and so long as it is reasonable the court will simply approve it.
How 50 Cent’s Plan Would Work
According to court papers, the Chapter 11 repayment plan in Jackson’s case would require the rapper to give all his income to a bankruptcy trustee until his $30 million debt is repaid. The proposed plan does not include any provision for Jackson’s living expenses. Jackson’s attorneys allege that requiring him to commit all his future earnings to the repayment plan violates the Thirteenth Amendment’s prohibition of indentured servitude. Jackson’s attorneys plan to submit their own repayment plan to the court for consideration this week.
Both the nature of the currently proposed repayment plan and the fact that there is a bankruptcy trustee at all are unusual. Typically, Chapter 11 bankruptcies are not assigned a trustee unless the court suspects fraud, dishonesty, incompetence, or gross mismanagement. The fact that the court seems to want a trustee in this case shows that there may be some suspicions here about the motive behind the bankruptcy.
Looking back on previous coverage of the rapper’s bankruptcy filing, we can see that many experts believed that the main purpose of the filing was to deal with some large debts coming from legal judgments against him. This included a failed headphone deal worth over $18 million and a sex tape judgment worth $7 million. Jackson himself is estimated to have assets worth $155 million so it is not as if he would be left destitute if the unusual repayment plan was approved.
Need Help With Chapter 11 or Chapter 13 Bankruptcy?
Though your filing may not be anywhere near as controversial as 50 Cent’s, it definitely has the potential to get complicated. Fortunately you can get expert assistance securing maximum debt relief with a bankruptcy attorney from California Bankruptcy Relief on your side. Call 951-755-1000 now to learn more.
