By Kitty J. Lin
Rapper DMX filed for Chapter 11 bankruptcy relief on Monday, July 29, 2013 in the Southern District of New York. The bankruptcy case number is 13-23254. He filed his bankruptcy case under “Earl Simmons” aka DMX aka Dark Man X. He previously filed a Chapter 13 bankruptcy petition back in August of 2009, but the case was dismissed. He also filed a Chapter 7 bankruptcy petition in December of 2009 but did not receive a discharge of his debt.
According to his filed petition and list of 20 largest creditors he has debts like most other consumers: he has small medical debts, credit card collection and other types of collection activity. He also has multiple judgments filed against him that exceed over $400,000. He owes American Honda Finance a little over $21,000 for an unsecured car loan. His largest debts are his family support obligations: one where he owes more than $1.24 million and another where he owes a little over $84,000.
It seems like there are more and more professional athletes and movie stars seeking the advice of bankruptcy lawyers to file for relief. The mortgage meltdown took down a number of wealthy athletes the last few years. Child support and unpaid taxes are also issues that celebrities have issues with, especially retired athletes. Once they retire and they do not receive a check each month cash flow tightens up real quick. Too many fancy leased cars and extravagant homes do not help either. Hopefully DMX will bounce back strong as ever from his bankruptcy filing.
Everyone files for bankruptcy to obtain a “fresh start” in their lives. Everyone makes mistakes whether they are financial or otherwise. The key is recognizing those mistakes and doing something about it. Filing for bankruptcy is not a shameful action. Ask any bankruptcy attorney, the need to file bankruptcy can truly happen to anyone. It can happen to someone that was rich and famous and made some bad investment decisions. It can happen to someone that has to support a family of five working a minimum wage job living from paycheck to paycheck. I always tell my clients that it is a business decision they make when their debts exceed their ability to repay them. Everyone has the chance to correct their mistakes and should not be held prisoner by their debts for the rest of their life. Everyone deserves a second chance for a “fresh start.” Once you get rid of the toxic debts you are free to begin again like DMX will be able to.