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Financial challenges affect people from all walks of life

Those in Massachusetts who are experiencing financial challenges might feel as if they are all alone in the world, and the situation is never going to get any better. However, the prospect of bankruptcy does not simply affect those who do not have access to significant amounts of money, property and other assets. In fact, one need only look at the political landscape and the rise of businessman, Donald Trump, to the top of the presidential polls to see that bankruptcy need to be the end of one's life. Celebrities might have an otherworldly quality, but they too face financial problems and require debt relief to get back on stronger ground.

Famous people often go bankrupt more frequently than everyday people. It was reported that 78 percent of former players in the National Football League go bankrupt within two years after they have retired. In addition to Mr. Trump, former boxer, Mike Tyson, went bankrupt after accruing $400 million. While it could be difficult to put one in the position of these individuals, there are certain factors that can be adapted to suit everyone.

Going bankrupt and being broke are two separate things. Understanding the different types of bankruptcy options available from Chapter 7 bankruptcy to Chapter 11 can help in deciding which is preferable.

Chapter 7 is often linked to being "broke" as assets can be liquidated to pay back creditors. Chapter 11 is used to rehabilitate and avoid having to sell-off one's property.

Another option is Chapter 13, which can be used by those who have a regular income to come up with a plan to pay debts in a certain amount of time. Celebrities might be able to use their names and their fame to garner paychecks. So too can people who are not famous, but have the ability to create revenue use forms of bankruptcy to reallocate their debts and get into a better position.

The fears that everyday people have are similar to those of celebrities. Keeping one's home, cars and other possessions is often paramount when unexpected life changes and rising debts have led to financial turmoil. When considering filing for bankruptcy, it is wise to understand how the process works and what the aftermath will be. Speaking to a lawyer can provide context and information on how to proceed and whether bankruptcy is the right choice or other solutions are better.

Source: HuffingtonPost.com, "Is it Possible for Celebrities to Go Bankrupt and Still Be Rich?," David Wither, Feb. 26, 2016

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