Court papers show that well-known R&B singer Toni Braxton has escaped some of her debt as she faces a Chapter 7 bankruptcy case.
A United States Bankruptcy Court recently granted the singer a bankruptcy discharge, which will relieve Braxton of certain debts. For those debts she will now be immune from creditors attempting to collect on what is owed.
The court didn't specify which debts Braxton was able to alleviate; and the new developments do not cancel out her pending bankruptcy case that was filed on Sept. 30. This most recent case is her second bankruptcy proceeding since 1998.
In general, there are certain types of debt, such as taxes, student loans, fines and criminal restitution that are typically not eligible to be removed via a bankruptcy discharge.
Overall, Braxton has had good fortune in the pending approval of her Chapter 7 bankruptcy case after a judge already ruled she will not be forced to liquidate many of her belongings, including a Porsche, household goods, a life-insurance policy and jewelry. However, she still must make $5,000 monthly payments for the next 15 months to her bankruptcy estate.
When Braxton initially filed the bankruptcy claim, she recorded $1.6 million of assets against $18.3 million in liabilities. Of that debt, $16 million was money she owed to record labels Arista and Atlantic for royalties.
Some of Braxton's other debt was attributed to $39,000 in property taxes, and three years worth of tax claims by the Internal Revenue Service totaling $734,000. Braxton also had credit card debt she has yet to pay off, including $53,000 to Chase National Bank and another $36,000 to Chase.
Source: The Wall Street Journal, "Toni Braxton Scores Bankruptcy Victory," Aug. 30, 2011