Lil Kim filed for Bankruptcy in Newark New Jersey and now has the same options that anyone filing would have. According to the bankruptcy filing she stopped a foreclosure sale on her house by filing. Generally the bankruptcy will allow a debtor to resume regular mortgage payments and pay missed payments over time. According to papers filed by Rushmore Loan Management she missed a mortgage payment of approximately $10,000.00 due after she filed. They want to foreclose. Because of her circumstances she is going to attempt to do a loan modification which is another option debtors have. Typically the debtor resumes payments but rather than paying the arrears through a separate payment the debtor attempts to restructure the loan so the arrears are added back into the mortgage. Although Lil Kim's assets and income and expenses are more than the typical person, the rights under the bankruptcy law are the same.
Speak with bankruptcy attorney first. Most people are unfamiliar with the bankruptcy process. They know it can help eliminate debts but are not sure of the impact of owning assets. As a result, sometimes before going to see the bankruptcy lawyer the individual will transfer a vehicle into a relatives name or repay the relative with money received from a tax refund before seeing the lawyer. It is a mistake. First, any such transfers or payments must be reflected on the bankruptcy schedules. In addition in most instances the individuals could have filed bankruptcy and used exemptions to protect the assets. However, if they transfer the item or make the payment the trustee can overturn the transfer or payment and use it to pay your creditors. And even if you have exemptions available, since you voluntarily gave away an asset when the asset is brought back you cannot exempt it. So talk with bankruptcy attorney first if you are thinking about filing bankruptcy.