Jeffrey M. Rosenblum, P.C.
A Fresh Start

DMX may have to convert from Chapter 11 to Chapter 7 bankruptcy

DMX has many fans on Long Island, New York, among other places, and it might have been a shock for his fans to learn that the rapper is in the middle of insolvency. However, at the moment, that is not the rapper's only problem. An official from the Justice Department is challenging his bankruptcy claim after seeing delays and inconsistencies.

The official who monitors New York bankruptcies is asking the judge to have the rapper's bankruptcy petition converted from Chapter 11 to Chapter 7 bankruptcy or to have the bankruptcy case dismissed. The request stemmed from the rapper's alleged inability to come to a meeting with his creditors, which was scheduled to occur last month. Additionally, he filed disorganized and inconsistent court papers and failed to comply with the official's requests for financial records.

According to the official, DMX's actions have negatively affected the authorities' confidence that he will honestly disclose his assets. Allegedly, he has reported an inconsistent monthly income and stated that he had $0 worth of clothing among his assets although he also stated that he spends $1,000 a month on clothes.

In 2009, DMX also filed for a bankruptcy petition, which was dismissed after the court deemed that he delayed the case, which hurt the creditors. This time; however, if the judge approves the request, DMX will have to sell his assets to pay his creditors or have to deal with the creditors directly.

There are many reasons why people end up with overwhelming debt. Filing for bankruptcy is a way to have a fresh financial start; however, once it is filed, the petitioner must adhere to the payment plan or face the consequences.

Source: The Wall Street Journal, "DMX in Hot Water with Bankruptcy Watchdog," Jacqueline Palank, Oct. 22, 2013

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