Actor Armand Assante Files for Chapter 11 Bankruptcy
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Actor Armand Assante Files for Chapter 11 Bankruptcy

October 13, 2011

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Actor Armand Assante filed for Chapter 11 bankruptcy protection in early October, according to reports from the Wall Street Journal. Assante, known for his roles in movies including Strip Tease, Hoffa and American Gangster, provides yet another reminder that Americans of all income levels can get in over their heads financially.

Interestingly, Assante’s decision to seek bankruptcy protection was prompted by many of the same contributing factors that have led to the bankruptcies of less famous citizens. According to his bankruptcy lawyer, Assante was a victim of mortgage fraud relating to his estate in New York’s Hudson Valley.

Apparently, during a period in 2005 when Assante was filming in Bulgaria and Romania, members of his financial team worked out a modified mortgage deal for his 7,000-square-foot house. While Assante reportedly believed that the deal would help him regain his financial footing (it seems his income had suffered in recent years), his lawyer has asserted that the mortgage amounted to fraud because of a clause added to the fine print.

In fact, the lawyer has reportedly characterized Assante’s mortgage loan as "one of the most predatory" he has come across in his work, which has included several hundred foreclosure-related bankruptcy cases.

Before he filed his Chapter 11 bankruptcy petition, Assante was facing foreclosure on a horse farm he owns. An automatic stay order from the bankruptcy court will prevent the foreclosure auction from taking place until the court can review the terms of his bankruptcy case and issue a ruling.

Chapter 11 for Individuals

In most cases, individuals opt for Chapter 7 or Chapter 13 bankruptcy rather than Chapter 11 protection. This is because Chapter 11 costs significantly more to file (court fees exceed $1,000 for Chapter 11, but top out around $300 for the other two). Some individuals, though, are unable to seek Chapter 13 (because of debt limits) or Chapter 7 (because of income restrictions) and opt instead for chapter 11.

Chapter 11 may also appeal to individuals who wish to have more flexibility reorganizing their finances than either Chapter 7 or Chapter 13 permits. When businesses reorganize, they most commonly file under Chapter 11 of the U.S. Bankruptcy Code.


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