New York residents may have heard that actress Kelly Rutherford filed for Chapter 7 bankruptcy after an expensive divorce and child custody battle that cost her over $2 million in legal fees. In addition, her income had been drastically reduced because she was no longer making the $486,000 per month salary that she had been during her Gossip Girl TV series. Now her income is reported to be lower than $1300 month.
The actress has two children, ages four and six, who are reported to be living with her ex-husband in Monaco. Traveling to and from Monaco has strained the actress’ finances, along with $35,000 she owes in back taxes and a $25,000 American Express bill. She has also borrowed several thousands of dollars from relatives and friends in order to ameliorate some of her financial challenges. Her only assets appear to include about $12,000 in the bank, $10,000 in furniture, and jewelry valued at approximately $1500.
Chapter 7 bankruptcy should eliminate most debt, unless she has outstanding student loans and tax debt. Kelly Rutherford appeared to have more debt than she could afford to pay, especially because her divorce and custody battle were so costly. Since her income had become a fraction of what it had once been, choosing a Chapter 7 bankruptcy might have been her best choice under the circumstances.
People struggling with increasing monthly bills may want to consider bankruptcy in order to keep up with monthly payments. Additionally, filing for bankruptcy will curtail annoying calls from debt collectors. A bankruptcy attorney may be able to help those in serious amounts of debt get relief.
Source: Daily News, “Kelly Rutherford files for bankruptcy after costly divorce, custody battle“, Zayda Rivera, June 24, 2013by