It doesn't take too big of a downturn in the economy to affect an individual's ability to keep up with their bills. Before long, the individual may get so far behind in payments that he or she may be unable to catch up. In these instances, one of the only options available may be to file for bankruptcy. There are two options for bankruptcy; liquidation or debt reorganization. Chapter 7 bankruptcy allows the debtor to discharge most if not all of their bankruptcy. Chapter 11 or 13 allows the debtor to create a debt reorganization plan to reduce or eliminate interest rates and fees associated with the debt.

A prominent horse owner filed for bankruptcy last week. He filed for Chapter 7 bankruptcy in California May 24. He listed his liabilities between $50 and $100 million and his assets as $10 to $50 million. Bankruptcy will sell off his assets to pay creditors and satisfy some of his debt.

This horse owner sold CNET to CBS in 2008 for over one billion dollars. But he ended up in debt shortly after through the purchase of homes, horses and art.

His horses are located in Virginia and they were purchased in 2007 for about $15 million. The creditors listed in his filing include others in the horse industry as well as a few veterinary services. He is also in debt to the attorneys he used to purchase other horse related ventures.

One of the biggest benefits to filing for bankruptcy is that it places an automatic stay on creditor actions. This includes liens, repossessions and foreclosures.

Source: Horse.com, "Owner Minor files for Chapter 7 bankruptcy," Frank Angst, Jun. 1, 2013