Bankruptcy Lawyer Bryan W. Stone answers the question: “Can I get credit after filing personal bankruptcy?”
There have been new developments in the ongoing saga of Curtis James Jackson III’s bankruptcy. Jackson, AKA 50 Cent, filed for bankruptcy last year after revealing that he owed more than $25 million, the vast majority of which is owed to two creditors. The problems began soon thereafter, with the creditors arguing that Jackson was hiding assets and posing for pictures that indicated he was far from broke.
The judge presiding over Jackson’s bankruptcy case, Judge Ann Nevins, recently held a hearing which the rapper attended. During the course of the proceeding the judge made sure to lecture Jackson about his behavior. Though Nevins was quick to say that she would not presume to tell anyone what they can or cannot say given our right to free speech, she did urge Jackson to think more carefully before posting photos to his social media accounts. Pictures of a supposedly bankrupt person posing with stacks of cash hanging out of the waistband of his pants does not inspire much confidence in the truth of his claims.
Judge Nevins reminded Jackson that bankruptcy is a very serious process and deserves to be treated as such. In fact, Nevins said that the posts caused her to have doubts about whether Jackson had been forthright in his filings. The social media posts made her wonder whether the allegations made by Jackson’s creditors concerning nondisclosure of assets and a lack of financial transparency were true.
Though Jackson may not have enjoyed the stern lecture about his online behavior, he was happy to report to the judge that he and his two main creditors were continuing to negotiate to reach a debt settlement arrangement. Should the deal take place, 50 Cent can exit the bankruptcy process and begin a mutually acceptable repayment plan.
So how do these debt settlement discussions normally work? Generally, creditors are eager to collect as much of the money they are owed as they believe is possible. If a debtor appears to be having financial problems, the creditor may decide to negotiate with the debtor privately and outside of a bankruptcy process to reach a settlement of the account. This settlement usually results in a reduction of the amount owed, requiring the debtor to make payments (or pay a lump sum amount) until this newly agreed upon amount is repaid.
From the creditor’s perspective, debt settlements can be a good thing in that they are guaranteeing at least some repayment. For a debtor, it can obviously be beneficial because the amount owed is almost always reduced, with the creditor agreeing to write off some portion of the original amount as a loss. For this to happen the creditor will likely require disclosure of your income and assets as well as your other debts, proving to them that you are indeed suffering a financial hardship.
In the event of a debt settlement, it is important to ensure that the matter is handled properly. If you agree to a settlement, be sure that it is accurately reported on your credit history. Some creditors will fail to report settlement payments to credit bureaus (which they are required to do) and this can mean that your credit report simply shows a delinquent account. In other cases, the creditor will agree to write off a debt, yet never report this to the credit bureaus, meaning the full balance still appears as owed. Be sure if you go to the trouble of negotiating a debt settlement that the creditor lives up to its end of the bargain and accurately reports the arrangement.
If you are contemplating bankruptcy in the Charlotte area, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with legally sound advice for your particular situation.
About the Author
Kyle Frost joined Arnold & Smith, PLLC in 2013 where he focuses his practice on all aspects of civil litigation and bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.
Born and raised in upstate New York, Mr. Frost attended the University at Albany on a Presidential Scholarship, graduating magna cum laude with a double major in Political Science and Sociology. He went on to attended Wake Forest University School of Law in Winston Salem, North Carolina.
Following college, Mr. Frost spent over a year teaching English in South Korea. He worked in a private school in Seoul developing curriculum, English programs, and educating both children and adults that were interested in learning a new language.
In his spare time, Mr. Frost enjoys homebrewing, fishing, and travelling.
See Our Related Video from our YouTube channel:
See Our Related Blog Posts: