$8.25 million (monthly breakdown: $84,400 for monthly expenses and maintenance) for a 21-bedroom Farmington, CT, mansion.
$855,091 for child support.
$64,909 for the American Express bill.
$1000/month for “personal grooming.”
And the list–both of expenses and assets–goes on. In bankruptcy, as in divorce, there are no secrets.
In recent memory, no one understands that more acutely, or more publicly, than hip-hop artist 50 Cent. The rapper, real name Curtis Jackson, filed Chapter 11 bankruptcy in Connecticut court on July 13, possibly to avoid shouldering the multi-million dollar burden of losing two separate lawsuits. Like anyone who files for Chapter 11, Mr. Jackson will be subject to paying back his debts according to a judge-approved plan.
While declaring $24,823,899.18 in personal property and cash (and a whopping $32,509,549.91 in debt) might seem completely unrealistic for most of us mere mortals, there are a few lessons we can learn from Mr. Jackson’s financial difficulties.
Declaring Chapter 11 means that Mr. Jackson will continue to manage his own business affairs (as opposed to appointing a trustee to deal with his estate), and retain most of his assets (as opposed to liquidating them). Much of Mr. Jackson’s money is tied up in property and business interests, so this bankruptcy filing means that he doesn’t have the cash on hand to pay his creditors, which is quite different than if he didn’t have the cash at all.
In order for the court to properly assess what you own and what you can reasonably afford to pay, you need to provide a meticulous accounting of your finances. All the way down to the $5000 you pay the gardener to weed your roses every month. If you file, be prepared to pay: one of the costs of filing bankruptcy is complete honesty about your long- and short-term income and expenses.
And finally, avoid doing what got 50 Cent in this situation in the first place: posting a sex tape online, then getting sued for it. That shouldn’t be too hard.
Photo credit: Tiger Direct