When filing for bankruptcy, you may worry about what will happen to your assets. What you may not consider is what will happen to your artistic works and royalties. Artistic works fall under intellectual property (IP) and can include things such as composed songs, films, or literary works.
Artistic Works in Bankruptcy
If you have composed music or own copyrighted artistic material, you need to understand what could happen to them when filing for bankruptcy. The royalties that you receive become part of your assets in a bankruptcy. Your appointed Trustee can take any income generated by these assets to repay your creditors. So, any income generated by songs or copyrighted materials before filing for bankruptcy are considered part of your bankruptcy estate. However, anything created after the filing will not be part of the bankruptcy.
In 2010, Toni Braxton filed for Chapter 7 bankruptcy. As a result, the rights to twenty-seven of her songs were put up for auction in 2013 to help pay off her debt. She made a bid to reacquire the rights to her songs, with the permission of the bankruptcy court. However, she was outbid and no longer has the right to receive any royalty payments for those songs. She is also unable to make further use of those songs.
What happened to Toni Braxton is an example of how your artistic works can be sold in a Chapter 7 bankruptcy, but there are other options to consider.
Don’t Forget Royalties!
Rapper Young Buck filed a Chapter 7 bankruptcy in 2020, but hid the fact that he was collecting publishing money through his company. A complaint was filed and a settlement agreement with the bankruptcy estate was reached. Now, he will have to repay the $24,228.14 that he received after he filed for bankruptcy.
So, What Can You Do?
The first step is to meet with an experienced bankruptcy attorney. You will want to discuss your financial situation in detail and present your concerns about losing your IP. The attorney will be able to explain in detail how filing for bankruptcy under Chapter 7, 11, or 13 will affect all of your assets. Be sure to do your research to help you make an informed decision.
Need More Information?
Contact our office today to Schedule your free phone consultation. We will listen to your specific situation in detail and provide information about the options that will work best for you.
At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like you to get to know us. We want you to be sure you are the right fit for us and that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.