David Cassidy Files for Chapter 11 Bankruptcy

by San Antonio Attorney

Hollywood actor David Cassidy has a $12,500 monthly income, but spends $27,000 throughout the same period.  This means that he is piling up a staggering $174,000 in debt yearly.

The 64-year old former teen heartthrob sought for Chapter 11 bankruptcy protection to deal with his financial troubles, after a hard year that included his third arrest for drunken driving and a divorce battle with Susan Cassidy, his wife of 23 years.

Cassidy still has $1.6 million balance on his $3 million home in Florida, and he owes more than $290,000 in personal credit to Wells Fargo Bank.

When his legal, financial and personal battles are finally over, Cassidy can at least take comfort in the funds he is expected to receive.  He will be paid $94,000 after a lengthy court battle with Sony over earnings from the merchandising of Partridge Family, and he will finally get hold of two pensions from his acting career.  He also has $28,000 in equity in his Chevrolet Corvette and anticipates a $30,000 tax refund.

Though Chapter 13 and 7 are considerably more common options for personal bankruptcy, Chapter 11 may also be used by individuals.  Chapter 11 reorganizes and restructures the debtor’s finances, and is mostly employed by corporations.  Under this bankruptcy process, the filer is called the debtor in possession, meaning the possession of property is retained by the debtor while the reorganization plan is carried out.  The reorganization plan involves repayment of debts through a court-approved repayment plan. When the payments are completed under the reorganization plan, the Chapter 11 debtor obtains a debt discharge.

Any individual considering a Chapter 11 filing needs to consult with a Debt Relief Attorney prior to filing any bankruptcy to know which of his debts may not be eliminated in bankruptcy.

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