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Grammy award winning singer files for personal bankruptcy

Financial difficulties can affect anyone -- athletes, actors, singers and even Arizona residents. These difficulties can arise for various reasons, including unexpected health problems, loss of job and mismanagement of finances. It was supposedly for the third reason that the Grammy Award winning singer Dionne Warwick filed for personal bankruptcy recently.

Arizona residents may have heard of Whitney Houston's 72-year-old cousin, famous for her song "Walk on By." Filing for personal bankruptcy in her home state, the singer reported the cause of her bankruptcy as gross financial mismanagement throughout 1980s and 1990s, when her average monthly income was more than $20,000. Though Arizona residents struggling with financial problems may not have earned as much money as the singer, their basic problems are the same -- their liabilities far exceed their assets. And the solution is one Arizona residents may also want to consider -- Chapter 7 or Chapter 13 bankruptcy.

The singer's liabilities, well into the millions, arise from taxes owed to the Internal Revenue Service and the state of California. Her representative maintains that the back taxes have already been filed but the interest payments and penalties continued to accumulate.

Arizona residents may not be aware that Chapter 7 bankruptcy can wipe out consumer debt and stop creditor harassment. In addition to this, filers may be able to maintain possession of key assets, such as the residential home and vehicle. The list of bankruptcy exemptions in Arizona is quite exhaustive.

Financial difficulties can plague anyone at any time and it is important to know that there is a way out. Wiping out debt can give debtors the chance to start over with valuable lessons on managing their finances better.

Source: USA Today, "Dionne Warwick files for personal bankruptcy," Ann Oldenburg, March 26, 2013