Submitted by Rachel R on Thu, 11/07/2013 - 8:41pm
Image source: Yahoo.com
It may seem like celebrities, athletes and singers have it made. They’re famous, they’re rich, they ride in luxury cars and live in huge homes. But the fact is, they can have money problems that would make ours look tiny by comparison. As with mortal people that file bankruptcy, often it is major life events that cause the financial stress that leads to bankruptcy. For professional athletes, actors and singers, job loss or a slowdown in work can be just as devastating as they are for more modest earners. And celebrity divorce can be financially catastrophic! Rapper DMX is one of the most recent celebs in bankruptcy and his case has him in legal – as well as financial – hot water.
DMX filed for a Chapter 11 in order to restructure debts associated with his personal life and entertainment career. However, a New York bankruptcy court Trustee asked that the rapper’s case be converted to a Chapter 7 so the performer’s assets can be sold off to satisfy his creditors. One of the issues that led to DMX’s problems with the court is the inconsistency in the income he claimed he earned. In one filing, he reported it at less than $2,000 per month while in another it was reported as $5,000. This is quite a big difference and it’s understandable that this inconsistency would raise some eyebrows.
In his Chapter 11 filing, DMX listed $50,000 in assets and between $1-$10 million in liabilities including child support, auto leases and other business and personal debts. He claimed that $1.4 million in assets are tied up in litigation and that his monthly expenses far exceed his income. DMX’s petition also lists no money in the bank, no automobiles owned, no jewelry or clothes. Yet he also claimed expenses of $500 per month for dry cleaning. That’s the kind of inconsistency in any case – celebrity or mere mortal – that will make the court suspicious.
Among his debts listed are over $1 million in child support which the bankruptcy court won’t be able to help him with. No amount of fame can get a bankruptcy Trustee to lower your alimony or child support payments. That’s the exclusive provenance of family court…
DMX also listed four judgments against him and one pending lawsuit that have tied up significant assets. The judgments alone amount to $440,000 of which he’s disputing $200,000. Medical bills total roughly $4,000. The financial problems are bad enough to deal with on their own, but his publicist told HipHopDX that his child support arrears have caused his passport to be suspended which has cut into his ability to generate income by touring.
Image source: LongIslandBankruptcyBlog.com
This week, DMX’s bankruptcy drama came to an abrupt halt. A bankruptcy judge tossed his case out of court for proving untrustworthy. The court said they had to dismiss the case because of “obvious inconsistencies regarding his income and assets, rendering it impossible to ascertain his financial affairs.” A bankruptcy filing by the rapper in 2009 was dismissed because the singer unreasonably delayed response and appearances. Not only did the judge kick out the rapper’s case but he also blocked him from filing another bankruptcy for at least 18 more months.
So what’s the lesson for everyday North Carolina bankruptcy filers in DMX’s rocky road to insolvency? Give accurate information to your attorney, never lie about your income or assets and always appear when the court tells you to and respond promptly and accurately when asked for information from the court. If your debts are out of control, a North Carolina bankruptcy may be the best option to give you a financial fresh start. Contact the law offices of John T Orcutt for a free consultation on improving your finances!
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