American R&B singer Toni Braxton has filed for bankruptcy again, the first time was in 1998. Braxton's recent bankruptcy filing states that she has between $10 million and $50 million in debt but only has between $1 million and $10 million in assets. The singer has listed many creditors in her bankruptcy, including AT&T, The Four Seasons Hotels, Cedars-Sinai Medical Center and Tiffany & Co. Also, the IRS has reportedly filed a $396,000 lien against Braxton for unpaid taxes. So why has the songstress filed bankruptcy a second time?
Well, we don't know the specifics of Braxton's financial situation; but there are a few core mistakes debtors make that force them into a second bankruptcy:
- Failure to face the reality of their financial situation. Being realistic about your finances is important after your file bankruptcy. Being realistic and facing up to the facts about your income, expenses and your ability or inability to enjoy certain luxuries is at the heart of preventing a second bankruptcy. Many debtors fail to give themselves this reality check.
- Failure to adjust your finances to the reality of your financial situation. Some debtors fail to make adjustments to their lifestyle after they learn that they are not earning as much money as they hoped and cannot afford certain things. This failure to adjust can result in long-term overspending, accumulative debt and eventually a second bankruptcy.
- Failure to seek professional advice. Let's face it, not all of us are gurus at personal finance so we may need a little guidance, especially after we exit bankruptcy. Unfortunately, some debtors fail to get the advice they need and end up doing the same things that landed them into bankruptcy in the first place.