After a bitter and contentious divorce, Mel Gibson's ex-wife Oksana Grigorieva has filed a chapter 13 bankruptcy. The Russian pianist incurred over $250,000 in legal bills from the divorce, and is now claiming that she is so broke.
She claims to have just $10 in cash to her name, and $48,000 overall in assets. But that didn't stop her from running up $51,000 in credit card debt just before filing, bringing her overall debt load to $438,000.
Her plan proposes that she pays $372 per month for five years, claiming that that is all that she can afford, despite receiving $22,500 per month in child support. Not so fast, said the trustee. Let's take a look at those expenses!
This trustee has declared many of Oksana's monthly expenses as frivolous, including:
- $2,000 a month in home maintenance
- $750 in electricity and heating
- $300 cell phone
- $300 personal care
- $90 a month for gopher patrol (Gopher Patrol? Seriously?)
The sudden $51,000 in credit card debt was also not lost on said trustee, which probably has him scrutinizing the case even more!
A debtor filing a bankruptcy can only incur monthly expenses "reasonable and necessary" for his or her support and that of dependents. As I commented about this before with the filing of Dionne Warwick last year, with this kind of debt, a person can be expected to make some sacrifices and cut back on the expenditures, especially when they are higher than normal or just unnecessary (like I said, Gopher Patrol? Really?).
Her current plan proposes to pay creditors 5 cents on the dollar. Just by eliminating half of the utilities and cell phone, two thirds of the personal care expense, three quarters of the home maintenance, and ALL of the gopher patrol (a savings of $2,315 per month), she could increase her payment to creditors by 32%.
Anyone considering a chapter 13 needs to look carefully at their monthly expenses to make sure that they are reasonable. If they do, the trustee will be more likely to accept your proposed repayment plan, and your filing will have smoother sailing.
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