Could you get by on $16,000 per month? This is only somewhat lower than the per capita income in Kentucky for 2012, at $22,300. Well, if you are the comedian Sinbad, you can’t. You see, he is $10,992,715 in debt, and $16,000 a month is simply not enough to service his debt payments. So, he has filed a Chapter 13 bankruptcy, to attempt to reorganize his finances.
Many in the entertainment industry get into trouble with their taxes, and Sinbad is no different. He owes $2.3 million to the California Franchise Tax Board and $8.3 million to the IRS from 1998 to 2006. Because they do not work jobs where taxes are withheld, they are responsible for the bookkeeping, and apparently, other things are more interesting than paying taxes. This and other celebrity bankruptcy show that it is not always lack of income that triggers a Chapter 13 bankruptcy.
We know that for many people in Kentucky, divorce or health problems can snowball into significant financial difficulties that can quickly result in your economic health crashing. A Chapter 13 can be a valuable tool to rebuild your finances.
The automatic stay that begins when you file bankruptcy stops creditor harassment and allows you a respite from the incessant demands for money. If you can still afford your mortgage payments, it can stop a foreclosure and enable you to pay the mortgage arrears in the bankruptcy plan.
Combined with the ability to reduce what you owe on unsecured debts, like credit card debt, you may be able to save your home and recover your financial stability.
Source: TMZ.com, “SINBAD, I’M BROKE…Again,” May 20, 2013