Last month we wrote about singer Tionne “T-Boz” Watkins filing for bankruptcy. As it turns out, the Chapter 13 filing by the former member of popular R&B group TLC was her second bankruptcy filing in 2011. While this is uncommon, it is possible.
The singer reportedly first declared Chapter 13 bankruptcy in February. At that time a plan was developed in which she would pay $2,500 a month to a Trustee for five years. That case was terminated in September after she reportedly provided the Trustee with the funds required.
She again filed for Chapter 13 bankruptcy the following month. This filing was apparently prompted at least partially by her inability to pay the mortgages on her home located in Duluth, Georgia. While the value of her assets totals $1,716,508, she reportedly owes $768,642.99 to her creditors.
Chapter 13 bankruptcy provides the opportunity to restructure one’s debt. This may be a good option if you are trying to hold onto real property or businesses. In this type of bankruptcy filing, a debtor works with an attorney and trustee to create a repayment plan. The plan usually lasts between 36 and 60 months. Each month the debtor makes payments to the Trustee who then disburses the money to creditors. At the end of the repayment period, certain remaining debts are discharged.
Under the new plan Watkins is slated to pay a total of $2,880 each month, for three years. Whether this second bankruptcy case filed will also be terminated early remains to be seen.
Source: Billbaord.biz, “TLC’s Tionne ‘T-Boz’ Watkins Files for Bankruptcy — for Second Time This Year,” Steven J. Horowitz, Nov. 28, 2011