Lil Kim Asks Judge to Drop Her Bankruptcy Case
Almost a year ago we wrote about rapper Lil Kim filing for bankruptcy protection. Now comes news that she is trying to get her bankruptcy case dismissed because she is apparently in better financial shape. However, as Lil Kim might find, it is far easier to file for bankruptcy than to get a judge to agree to dismiss your case.
Only Filed to Prevent Foreclosure on Home
As reported by website HotNewHipHop, Kim has reportedly told a judge that she only filed her bankruptcy case to prevent losing her $3 million New Jersey home to foreclosure. Her admission was contained in an affidavit that she filed with the bankruptcy court.
Lil Kim reportedly had been fighting to prevent foreclosure for the better part of a decade. She has owed over $1 million dollars in mortgage payment. According to court filings, Kim also owed around $4 million to other creditors, so she filed for Chapter 11 bankruptcy protection, which put an immediate halt to any collection efforts, including a foreclosure action.
Can She Get Her Case Dropped?
Because she filed for Chapter 11, Lil Kim might get her bankruptcy case dropped. However, most consumers do not file for Chapter 11, which is usually reserved for corporations or for individuals with large debt loads, like Lil Kim.
Instead, most creditors file for Chapter 7 liquidation. After you file this bankruptcy, all assets that you own immediately become part of your bankruptcy estate, which is controlled by the trustee. You don’t have an automatic right to back out of the bankruptcy simply because you have cold feet or because you realize that you will lose property if the bankruptcy goes through.
A judge will only grant a voluntary dismissal if he agrees that your creditors will not be disadvantaged. And your creditors get a chance to come in and ask the judge to deny your dismissal!
So, in sum, Lil Kim might be successful at backing out of a bankruptcy, but not all consumers will. For this reason, you need to carefully consider your reasons for seeking bankruptcy protection before you go ahead and file.
Your Options if You Can’t Get Your Case Dropped
Let’s say the judge won’t dismiss your case. What can you do? One option is to convert to a different bankruptcy, such as a Chapter 13. In this bankruptcy, you won’t lose any of your property. Instead, you will make payments to creditors over 3-5 years, paying back a portion of your debts. Only at the end of the bankruptcy can your unpaid debts be wiped out.
Conversion is a good option if the reason you want to pull out of a Chapter 7 is that you are afraid of losing some non-exempt assets. With a Chapter 13, you lose nothing. However, if you have another reason for backing out of a Chapter 7, then conversion to Chapter 13 might not be appropriate.
Changing your mind in bankruptcy can be costly. At Nowack & Olson, our Plantation Chapter 13 bankruptcy attorneys are here to help you think through your options. With our advice, you will be well-positioned not to file for protection unless you truly are ready.
Contact us today by calling 888-813-4737 to schedule a free consultation.