Back in May, reports surfaced that actor Mekhi Phifer filed for Chapter 7 bankruptcy in Los Angeles. Having accrued $1.2million in debt and only $67,000 in assets, Phifer and his wife allege they are unable to meet their monthly living expenses, in excess of $11,500. You may ask yourself, how does one accrue this much debt and not have any assets. In the celebrity world an actor gets paid sporadically depending upon when and where they are working. Outside of Phifer’s recurring role on ER, his acting gigs have been sporadic. When you go from earning a large amount of money, establishing a ‘celebrity’ way of life and then earn nothing for a time, you use your income to sustain your lifestyle. It is also likely that much of the credit extended was done so at a time when Phifer was earning a substantial income.
A common dominator amongst celebrity bankruptcies is tax debt. Unfortunately for them, discharging tax debt in bankruptcy has strict requirements and timelines concerning when the debt accrued and whether the person filed their returns timely, among other considerations.
Phifer’s plight is not that different from many of my clients. A loss of income for any period of time can be debilitating financially. My clients routinely live off of their credit cards and liquidate their assets so that by the time they come to see me to discuss bankruptcy; they have accrued tens of thousands of dollars in debt while having very limited assets. In the words of Tyler Perry, most of my clients are not living above their means, but by any means necessary.
I am a strong advocate for financial literacy being built into the state curriculum in our schools to help combat this epidemic. If you support this cause as well, contact your legislators!
If you have accrued substantial debt that is crippling you monthly, break the cycle and contact me to discuss your bankruptcy options.
-Factual details derived from ABCNews.com
Tiffany Franc is an attorney in PK Law’s Corporate and Business Services Group. She provides Chapter 7 and Chapter 13 legal advice and representation to individuals, and advice on bankruptcy alternatives, including debt restructuring and rehabilitation, to consumers facing debt collection, garnishment, liens and foreclosure and is trained in handling short sales and mortgage loan modifications. Ms. Franc can also assist businesses and individuals with navigating bankruptcy as a creditor.
In addition, Mrs. Franc represents clients in adoption proceedings (adult, step-parent, 2nd parent, interstate (ICPC) and finalizations in MD of out-of-state or out-of-country placements), child custody/access and child support matters, absolute and limited divorce hearings, prenuptial agreements and settlement negotiations in family law matters.
Tiffany can be reached at 410-832-5450 or firstname.lastname@example.org.