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. Artistic works fall under intellectual property (IP) and can include things such as composed songs, films, or literary works.
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.
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.
Contact our office today to schedule a free consultation. We will listen to your specific situation in detail and provide information about the options that will work best for you.