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Rapper 50 Cent just filed for bankruptcy! Is it no big deal, or will he be on the streets soon?
50 Cent recently filed for bankruptcy in the U.S. Bankruptcy Court in Hartford, Connecticut. More specifically, he filed for Chapter 11 bankruptcy. This move is a surprise to many, especially since Forbes estimated his net work to be at least $155 million this year. However, 50 Cent is downplaying the significance of the filing as simply a smart business decision to reorganize his financial affairs.
So, is the rapper facing financial ruin or not?
Despite his past successes, 50 Cent has been hit with several financial problems recently.
A couple months ago, 50 Cent's boxing promotion company, SMS Promotions LLC filed for bankruptcy.
Then last week, a jury ordered 50 Cent to pay a $5 million to Lastonia Leviston, rapper Rick Ross' ex-girlfriend. Leviston sued 50 Cent for invasion of privacy after he allegedly posted a sex tape of her online. In addition to the $5 million judgment, the jury still needs to decide whether to award punitive damages against the rapper.
When most people think of bankruptcy, they're thinking of Chapter 7 bankruptcy. In Chapter 7 bankruptcy, your property is liquidated to pay off as much of your debt as possible before remaining debt is discharged. While Chapter 7 bankruptcy provides relief from debt, it destroys your credit for as much as 10 years.
Chapter 11 bankruptcy is very different. Chapter 11 bankruptcy is a reorganization plan for businesses with heavy debt. The process allows beleaguered companies to make and implement a plan to repay debt and become profitable again while protecting assets from creditors.
Once a company files for Chapter 11 bankruptcy, an automatic stay is put on all debt collection actions. This means creditors cannot demand payment of debt. The business then continues to proceed as usual while the debtor negotiates repayments terms and lower debt amounts, and creates a payment plan.
So, it looks like 50 Cent won't be on a corner begging for loose change any time soon. Some reports speculate that 50 Cent is using this bankruptcy as a tactic against Leviston and her lawsuit to negotiate a more favorable settlement. Will it work?
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.
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