In September of last year, singer Toni Braxton filed her second bankruptcy with a reported $1.6 million in assets and $18.3 million in debts. Her bankruptcy attorney was recently able to win a bankruptcy discharge for some of her debts. Which debts receiving a discharge have not been revealed by the bankruptcy court records yet.
Those same court papers show $14 million owed to former record label Arista and $2 million owed to current label Atlantic, all for royalties. She reported about $39,000 in property taxes owed on a Duluth, Ga., home. The Internal Revenue Service has three years’ worth of tax claims against her: about $78,000 for 2007 taxes, $336,000 for 2008 taxes and $320,000 for 2009 taxes.
As for unsecured debts, Braxton owed some $26,000 to credit-card company Chase, about $53,000 to City National Bank for credit-card purchases, more than $6,800 in clothing purchases from Neiman Marcus and more than $15,000 to jeweler Tiffany & Co.
Braxton’s bankruptcy case is still ongoing and will not be closed because of the discharge. Her bankruptcy attorney was able to protect most of her personal belongings, including a piano and Porsche while striking a settlement with the bankruptcy trustee that will require her to pay $5,000 per month to the estate. One of the most important things to note about Braxton’s bankruptcy is that despite her high income and valuable assets she is still allowed to protect many of those assets with both exemptions and cash. Many bankruptcy debtors who make significantly less than some of our more famous debtors are worried about losing assets in bankruptcy. But the bankruptcy laws are very generous in protecting assets because that is the purpose of bankruptcy. Bankruptcy exists so that debtors can protect their assets while repaying their debts if possible.