Toni Braxton is the R&B singer famous for selling millions of records, winning several Grammys and making millions of dollars. Around twelve years ago, Braxton also became known for losing millions of dollars, falling into financial hardship and filing for bankruptcy.
Braxton first filed for bankruptcy in 1998. Twelve years later, she was back in bankruptcy court in 2010 citing debt in the millions and financial difficulties which were worsened by health problems. In 2010, the singer announced she was diagnosed with lupus. Braxton’s condition prevented her from rebuilding her career and earning what was necessary to pay off all of her debts.
Now, Braxton is being accused of bankruptcy fraud after transferring over $53,000 to her estranged husband, fellow singer Keri Lewis. The bankruptcy trustee in Braxton’s case claims she made the transfer to avoid paying creditors back in her bankruptcy case. The trustee adds that Lewis received the $53,490 after the money was “earmarked to repay creditors.” The trustee is allegedly suing Lewis as well as Braxton.
Braxton’s representative told a celebrity news site that all transfers made were legal, and intended for reasonable and necessary personal and business expenses.
In bankruptcy, the debtor cannot hide assets from the court. The allegation that Braxton hid assets and fraudulently transferred these assets to her husband will probably mean she will be back in court soon.
Braxton’s story shows that bankruptcy is not for the lazy and poor. Even the famous and wealthy file for bankruptcy. The process was created to help honest debtors who have fallen on hard times and need a fresh start. Illness can happen to anyone and, as a result, is one of the leading causes of bankruptcy filings.
Braxton’s case also shows that debtors have to be transparent in bankruptcy cases. From the moment of the filing, debtors must clearly list all assets and debts.