Some Michiganders may have heard about the release of the movie Addicted, a film based on the work of an author known as Zane. Although educated in chemical engineering, Zane has become fairly well known for writing racy novels and has had 25 books hit the bestseller list.
Still, Zane seems to be struggling under the weight of some personal debt despite her apparent literary success. According to officials in the state in which she lives, she owes hundreds of thousands of dollars in back taxes, including taxes to the federal government. The IRS has indicated that she owes $540,000.
On her bankruptcy petition, the author listed $3.4 million in debt compared to $1.4 million in assets, which consisted mostly of two homes. Zane also claimed on her schedules that she received less than $30,000 in income from her publisher in 2014.
Just given the amount that is at stake, the author's Chapter 7 bankruptcy petition is likely to be scrutinized more carefully than that of a typical Chapter 7 petitioner. After all, before receiving a fresh financial start, that author will be expected to surrender all non-exempt assets. Furthermore, whether she will actually be able to get out from under her tax debts will depend on the facts and circumstances of her case.
Nevertheless, successful Michigan residents need not fear filing a Chapter 7 bankruptcy simply because a reversal in fortune has left them in financial trouble. Like this author, self-employed people may find themselves a facing a sudden drying up of their income stream. When this happens, bankruptcy relief may be available, but it may be wise, especially in a high asset bankruptcy, for a debtor to speak with an experienced Michigan bankruptcy attorney before making a final decision.
Source: The Washington Post, "Author Zane filed for bankruptcy as her new movie, Addicted, was in production," DeNeen L. Brown, Oct. 4, 2014.