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Eddie Montgomery files for Chapter 7 bankruptcy

Even famous people may find themselves in financial trouble if they are not careful. Country western star Eddie Montgomery found himself in this type of situation recently, which forced him to file a Chapter 7 bankruptcy. Most people in Texas will remember the singer as a part of the award-winning musical duo, Montgomery Gentry.

The singer listed $1.9 million worth of assets in his recently filed bankruptcy petition. He also reported $13.4 million in liabilities in his filing with the court. Most of the singer's debts stem from a restaurant he owned which ultimately failed. The restaurant closed its doors suddenly in May 2013 and is planned to be sold in mid-January 2014. He was ordered to sell the restaurant in order to repay his creditors.

The restaurant had owed $12.7 million worth of default loans to a local bank, which Montgomery had personally guaranteed. His bankruptcy petition also lists around $8.4 million worth of claims, many of them are related to his restaurant business. The singer started up the restaurant with his wife in 2009. Along with the failing restaurant the singer also blamed his divorce from his wife for his financial troubles which ultimately led him to file bankruptcy.

Just like anybody else who files a Chapter 7 bankruptcy in Texas or any other state, the singer may be able to discharge any unsecured debts. When a business files this type of bankruptcy it ceases to exist as a legal entity. However, whether the filing is for a business or an individual, it is important to properly fill out the correct legal paper work. If one fails to do this, he or she risks having the petition thrown out completely.

Source: Kentucky.com, Country singer Eddie Montgomery files for bankruptcy, Janet Patton, Jan. 2, 2014

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