A Florida entrepreneur who filed for bankruptcy last year, is required as part of that proceeding to liquidate some of her assets in order to repay her creditors. According to the bankruptcy papers, she reported assets of $1 million and debts of $10 million.

Some of her assets include 14 of Princess Diana's famous gowns. She purchased the gowns just before Princess Diana passed away. She had hoped to showcase the gowns in a traveling worldwide exhibition in support of a charitable organization that the Florida woman founded, the People's Princess Charitable Foundation. The goal of the charity was to continue the charitable work that was at the heart of Princess Diana's mission.

However, legal fees, construction expenses and loans for the foundation inundated the charitable foundation. In addition, an unsuccessful fundraiser further drained the foundation's assets.

The Florida woman next started working as a real estate developer and made an investment in a failed housing development. This investment was made just before the housing market collapsed in Florida. She used the assets in the Princess Diana charity as collateral to fund this investment. When things went downhill, she and her charity were sued by her creditors.

As part of the payment plan in her bankruptcy proceeding, she is selling off the valuable assets that she collected for the charity. Among these is the blue velvet gown that Princess Diana wore when she danced with John Travolta at the White House as a guest of President Ronald Reagan. This gown is expected to raise at least $1 million at auction. With the money expected from the sale of the gowns, the woman is hoping that the proceeds will cover her debts so that she will be able to exit from bankruptcy free from creditors.

When people realize that their debts have become unmanageable, it is a good idea to review their options. This story is an example of how some people with good intentions get in over their heads with debt obligations. When things do not go as planned, bankruptcy can be one route to financial freedom.

Source: The Wall Street Journal, "Florida Entrepreneur to Sell 14 Princess Gowns," Melanie Cohen, 22 June 2011