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Annie Leibovitz has reached superstar status for her work behind a camera lens, but after defaulting on repaying a $24 million loan, she has become the latest subject of bright lights, big headlines, and a lawsuit to boot. Art Capital Group brought a breach of contract claim against her last week to recover the loan amount and associated fees which come due on September 8th.
On the line is more than money and reputation-- having leveraged her entire life's work she stands to lose rights to all of her photographs if a judgment is found against her.
And a lifetime behind the lens for the likes of Annie Leibovitz is more than meets the eye. She not only created a brand for provocative and intimate Rolling Stone and Vanity Fair covers through her iconic portraits of John Lennon and Yoko Ono, Michael Jackson, Demi Moore, Oprah Winfrey, and numerous other musicians, actors, sports figures, and celebrity figures--but her work is also exhibited at the International Center of Photography in New York and at the National Portrait Gallery and Corcoran Gallery of Art in Washington D.C. She captured both first and second place in the American Society of Magazine editors' "Top Forty Magazine Covers of the Past Forty Years".
Art Capital Group, a lending firm that makes high-end loans to celebrity figures using rights to their works as collateral, claims that that Leibovitz has denied it access to her properties and artwork to allow them to begin the process of selling them before the September deadline and in accordance with the contract terms of the loan.
Though Leibovitz is one of the highest-paid photographers in the world, the issue of how to handle creditors when a loan can't be repaid is not uncommon.
Here are 3 things to do when you can't pay your debts:
1. Negotiate with your creditors. Though you may want to run from them, run to them and explain any situation that is preventing you from making payments. Strategize and collaborate with them to come up with a plan to repay them and keep your shirt. There are also non-profit counseling organizations such as Myvesta.org that are available to help.
2. Prioritize and liquidate assets. Determine what you may be willing to part with and start decreasing your inventory with big ticket items you can stand to sell. This may alleviate immediate debt burdens and give you a little time to establish a budget and gameplan for long-term repayment.
3. Consider filing for bankruptcy. If even after negotiating with creditors, liquidating certain assets, and establishing a plan for repayment, you are still strapped to pay back a loan-- it may be time to consider bankruptcy options. Chapter 7 and Chapter 13 are federal bankruptcy provisions that either enable you to liquidate (Chapter 7) or reorganize assets (Chapter 13) to extinguish debt and repay creditors.
Whether Lebovitz's originals will be for sale at a retailer near you remains to be seen---in the meanwhile though, you can get your finances in order so you have a chance to buy one.