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Bestselling author files for bankruptcy

Florida residents may have heard of the bestselling book series "Rich Dad, Poor Dad." These books were written by Robert Kiyosaki and first published in 1994. Kiyosaki created a company to handle all facets of the distribution of the books. That company has recently filed for Chapter 7 bankruptcy protection despite the incredible success of the book.

So what went wrong? The books were promoted by Kiyosaki through his company, allegedly with the assistance of The Learning Annex, a business that arranged for influential speaking engagements in order to promote the book. However, The Learning Annex says it has never received a percentage of the profits that Kiyosaki's company made off of the book, despite their efforts.

The Learning Annex brought their claim to court and recently won a nearly $24 million judgment. However, Kiyosaki's company does not have sufficient assets to pay this judgment as it has not been in operation for several years.

As a result, its only option was to file for Chapter 7 bankruptcy in order to unwind the business, liquidate its assets and payoff its creditors, including a portion of this judgment.

In this case, Chapter 7 bankruptcy will serve to protect Kiyosaki's other interests, as well as his other assets. This is because his personal finances should not be affected by the court judgment against his company.

This story is a good example of how bankruptcy can help with overwhelming debt. It is not necessary to lose hope, or all of your assets, simply because you are faced with a court judgment. What is necessary is to know you rights and find out how bankruptcy law can help.

Source: New York Post, "Rich 'Dad,' bankruptcy Dad," Oct. 10, 2012

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