Celebrity bankruptcy is nothing new. Cyndi Lauper, Mike Tyson, Willie Nelson and Donald Trump – among others – have filed for bankruptcy protection at some point in the past. And right now, singer Toni Braxton is reportedly working out the terms of her second bankruptcy filing (the first was in 1998).

Braxton’s Chapter 7 case, filed last year in California, highlights some interesting Chapter 7 bankruptcy rules. Here’s a look at what she’s facing in court and what ordinary folks can learn about bankruptcy from her situation.

• Non-dischargeable debts: Some of the debts listed in Braxton’s Chapter 7 petition include those considered non-dischargeable in court. Tax debt, for example, often falls into this category (sources report that Braxton’s case included a debt of nearly $400,000 to the Internal Revenue Service). Chapter 7 filers may have certain debts excused, but they’re on the hook for repaying the non-dischargeable debts even after the end of the bankruptcy case.
• Exemptions: Chapter 7 bankruptcy filers are able to keep certain possessions out of the liquidation sale used to raise money for creditors. The specific exemptions filers get depend on their state of residence, but usually include a home, a car, clothing, work tools and other household necessities. In Braxton’s case, her lawyer has reportedly worked out a deal that will permit her Grammy awards and some other luxury items (like a Porsche and a piano) not usually protected in bankruptcy.
• Bankruptcy trustees: The trustee’s job in a bankruptcy case is to get as much money as possible from a filer’s estate and to use that money to repay creditors. In Braxton’s case, the trustee required the singer to work out a deal with the IRS for her tax debts. Sources note that, as of now, Braxton has agreed to make monthly payments to the government, which will have a lien on some of her more valuable possessions. This means that, if she falls behind on payments, the government can seize the property connected to the lien in lieu of payment.
• The goal of bankruptcy: Bankruptcy is intended to help filers eliminate debt while helping creditors recover as much of the money they’re owed as possible. In order to strike that balance, the court prioritizes some types of debt (like tax debt) over others (like credit card debt). A filer’s money (including any funds raised from selling non-exempt assets) is then distributed to the most important creditors first.
• Life after bankruptcy: While any number of external factors can lead a person to seek bankruptcy protection more than once, celebrities who file repeated bankruptcy petitions (especially those like Braxton, whose albums have sold millions of copies) remind us of the importance of making the most of the fresh financial start bankruptcy offers. After bankruptcy, filers must take steps to change their financial habits – otherwise, they’re likely to end up in bankruptcy court again.