Most people assume that the only people exempt from the fear of going bankrupt are celebrities. It’s hard not to think that way considering the millions of dollars high-asset people bring in every day. But when mounting debts become larger than assets coming in, the prospect of bankruptcy becomes just as real for them as it would for anyone living here in Pennsylvania.
Country singer Eddie Montgomery, who some of our readers may know from the duo Montgomery Gentry, learned this fact for himself recently when he had to file for Chapter 7 bankruptcy. According to his filing with the bankruptcy court, his has nearly $13.4 million in debts versus the $1.9 million in assets. Some financial experts believe that his debt-to-asset ratio was likely thrown off as a result of his recent divorce to Tracy Nunan and the failure of his restaurant.
Although most of our readers may never see their debt ratios climb into the millions, they likely know how Montgomery is feeling and can sympathize with what the country singer will have to do in order to get his finances back on track down the road. As many of you know, very specific criteria must be met in order to successfully file for Chapter 7 bankruptcy. Once a bankruptcy court has approved a person’s petition, a majority of their assets are liquidated in exchange for the cancellation of debt. Although it’s important to note that this form of bankruptcy can effectively ruin a person’s credit score, it is often the only way for some to get relief from mounting debts. A fact Montgomery now knows for himself.
Source: Kentucky.com, “Country singer Eddie Montgomery files for bankruptcy,” Janet Patton, Jan. 2, 2014