In Da (Bankruptcy) Club: What You Can Learn From 50 Cent's Chapter 11 Filing
Curtis James Jackson, III, better known as rapper 50 Cent, filed an individual Chapter 11 bankruptcy in Connecticut in July. The filing seemed to be triggered by a ruling made by a New York judge that he pay $5 million to a woman who sued him for posting a sex tape online in an attempt to embarrass a fellow rapper. Rather than file a Chapter 7 bankruptcy, which would mean the liquidation of his substantial assets, 50 Cent decided to file a Chapter 11 bankruptcy (he couldn't file a Chapter 13 bankruptcy because his debts exceeded the Chapter 13 limits) in an effort to keep his assets and reorganize his finances. Only time will tell if the bankruptcy will be successful.

While not many of our prospective bankruptcy clients have much in common with 50 Cent, a glance at his bankruptcy schedules shows some common assets that many of our prospective clients own:
  • Underwater homestead real property
  • 2 investment properties
  • 3 personal bank accounts
  • 3 individual brokerage accounts
  • Household goods and furnishings
  • Wearing apparel
  • Jewelry
  • Stock interest in several businesses
  • Vehicles
His debts include child support, unsecured debts resulting from judgments being entered against him, and personally guaranteed business debt.

Perhaps the most shocking part of 50 Cent's bankruptcy schedules are his Schedule I and J, which provide a glimpse into his monthly financial budget - they list his ongoing monthly income and his ongoing monthly expenses. He listed monthly income of $184,969.58, and monthly expenses of $108,000.00. If accurate, he has $76,969.58 of monthly disposable income (after paying his living expenses) to devote to paying his creditors. The issue may be whether he has more.

A closer look at some of 50 Cent's expenses reveals that his creditors may have some serious problems with how he spends his money on a monthly basis:
  • $5,000.00 on gardening
  • $1,500.00 on household supplies
  • $17,400.00 on his mortgage
  • $9,000.00 on security and protection
  • $14,200.00 on utilities
  • $5,800.00 on automobile leases
  • $3,000.00 on food
  • $1,000.00 on personal grooming
  • $2,000.00 on travel
  • $3,000.00 on clothing
The lesson that a prospective client can learn from 50 Cent's filing is that the tradeoff for trying to discharge a large amount of debt while paying creditors cents on the dollar is potentially altering one's spending and financial lifestyle.

There are many reasons why someone may need to file bankruptcy - loss of job, devastating illness, out of control spending habits, or inability to manage one's money are just a few. However, it is very disappointing when a prospect presents himself as a perfect candidate for bankruptcy, but fails to pull the trigger because he is unwilling to make changes to his financial lifestyle.

Discharging debt is not a right - it is a privilege. If everyone was able to keep 100% of their assets, get rid of 100% of their debts, and maintain the same lifestyle after filing bankruptcy, everyone would file bankruptcy. Sometimes, in order to take advantage of the benefits that bankruptcy can provide, and get a fresh financial start, one must be willing to sacrifice and make changes. 50 Cent made the difficult decision to file bankruptcy. Sometimes, deciding not to file bankruptcy makes 0 Cents. 
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Practice Areas

There are numerous circumstances that may warrant a Chapter 7 bankruptcy, the most common type of case filed by individual consumers. 

Many people are unaware that a Chapter 11 bankruptcy filing is available to individuals.

Personal Chapter 13

There are a number of reasons why a Chapter 13 filing may be right for you.

We discuss all options with you and we provide full implementation of the best strategy moving forward.

Corporate Chapter 7

If your business entity is facing overwhelming debt, a corporate Chapter 7 bankruptcy filing may be the solution to its troubles.

Corporate Chapter 11

A business that needs to restructure its finances is offered various beneficial tools in a Chapter 11 filing.
Creditors of bankrupt debtors have several avenues for recovering what is owed to them.


Assignment for the Benefit of Creditors

"ABC" is often the most efficient and cost-effective method for accomplishing the goals of a business that is in financial distress.


Upcoming Events
August 27, 2015 -
Bankruptcy Bar Association for the Southern District of Florida Installation Dinner and Awards Ceremony
Zach B. Shelomith will be installed as Second Vice President and Felipe Plechac-Diaz will be recognized as a Committee Chair for the Young Lawyers Committee


November 12, 2015
'Bankruptcy 101: Chapters 7 and 13'
9:00 a.m. to 5:00 p.m.
Hampton Inn, Brickell,
50 SW 12th Street,
Miami, FL  33130
sponsored by Pincus Professional Education
Jonathan Leiderman will be a featured speaker

Other Celebrities Who Filed Bankruptcy

50 Cent is in good company. Here is a list of some other celebrities who filed bankruptcy:

Teri Polo - Actress

Aaron Carter - Musician

Jose Canseco - Baseball Player

Gary Coleman - Actor

Willie Nelson - Musician

Larry King - CNN Host

MC Hammer - Musician

Mike Tyson - Boxer
About Leiderman Shelomith, P.A. 

 

Leiderman Shelomith, P.A. was founded by Jonathan Leiderman and Zach Shelomith in 2003. The firm quickly built an excellent reputation across South Florida as a boutique bankruptcy law firm, handling both personal and corporate bankruptcy matters, including Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, as well as state court Assignments for the Benefit of Creditors. Felipe Plechac-Diaz joined the firm as an associate attorney in 2014.  The firm began representing borrowers with their federal, state, and private student loan matters in 2014, including the defense of student loan lawsuits.

 

The firm's attorneys, who have 38 years of combined legal experience, have been recognized as a South Florida Legal Guide Up and Comer, a Super Lawyer Rising Star for the State of Florida, a Florida Legal Elite Up and Comer, and a Florida Legal Elite. Our attorneys are members of the National Association of Consumer Bankruptcy Attorneys, the American Bankruptcy Institute, and the Bankruptcy Bar Association for the Southern District of Florida, among other organizations. The firm's attorneys are also frequent lecturers at seminars and community programs, speaking about bankruptcy law to attorneys and the general public.

 

The firm, Mr. Leiderman, and Mr. Shelomith, are AV� Preeminent Rated Attorney's, awarded by LexisNexis� Martindale-Hubbell�, for having obtained the highest possible peer-review rating for their ethical standards and legal ability.

 

The firm represents debtors, creditors, and bankruptcy trustees in all aspects of bankruptcy cases, including litigation and appeals, handling both liquidations and reorganizations. The firm also represents borrowers in all aspects of student loan law, including federal, state, and private student loans. Our office is conveniently located in suburban Fort Lauderdale, Florida, and is easily accessible from anywhere in Miami-Dade, Broward, and Palm Beach Counties. We handle bankruptcy debtor cases across the Southern District of Florida, particularly in Broward, Miami-Dade, Palm Beach, and Monroe Counties, and other bankruptcy cases and student loan matters throughout the entire State of Florida.