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Famous singer resolves Chapter 7 case; forfeits rights to songs

Massachusetts readers who are struggling with debt might take some comfort from hearing that even the rich and famous can have financial troubles. Singer Toni Braxton, who enjoyed considerable success in the mid-1990s with her single "Un-Break My Heart", recently resolved a dispute with the bankruptcy trustee in her pending Chapter 7 bankruptcy case.

In most individual Chapter 7 bankruptcies the debtor has no assets to turn over to his or her creditors. Of course, the more property one has, the more likely it is that a Chapter 7 can take some time and can result in a debtor's having to surrender some property.

Among the items that Braxton listed in her bankruptcy petition were her copyrights to a number of songs. Copyrights are assets that can be taken and sold to pay one's debts in a bankruptcy. Braxton had to place these copyrights up for auction. She tried to buy the rights back by bidding $20,000, but another investor paid $40,000 and secured the songs. The rights to "Un-Break My Heart" were not among the copyrights sold at auction.

Braxton also had to pay $50,000 to reacquire some other personal property that the trustee had attached and was prepared to sell in order to satisfy Braxton's debts. She also had to pay $100,000 to the trustee to compensate for income she received from her performing work overseas.

Braxton also lost a house in Nevada and a mansion in Georgia to foreclosure. Her home in Georgia sold for $1.1 million following the foreclosure.

Although Braxton had to give up some assets, she still gets the benefit of a complete discharge from her debts. It is a price many who are struggling with debt are willing to pay for a fresh financial start.

Source: The Inquisitr, "Toni Braxton loses copyright to 27 songs in bankruptcy filing," July 29, 2013