In a story that is sure to be overshadowed by the recent news of Detroit going bankrupt, Earl Simmons, more popularly known as DMX, has filed for Chapter 11 bankruptcy. While his debts are somewhere between $1 million and $10 million, he only lists around $50,000 in assets. His debts range from a $200,000 judgment to a $75 medical bill.
He lists previous mismanagement of funds as the reason for seeking relief. This mismanagement now prevents Mr. Simmons from obtaining a passport. According to the United States Bureau of Consular Affairs’ website, an individual cannot obtain a passport if they owe $2,500 or more in child support. The rapper allegedly owes $1.24 million dollars in child support to his ten children. With an international tour in the works, this is potentially problematic.
What seeking debt relief under Chapter 11 allows Mr. Simmons to do is set up a payment plan for his creditors and his child support. Once an acceptable payment plan is set up, he may be eligible to successfully apply for a passport. It also protects him from his creditors attempting to collect on their debts outside of the plan, including any external legal action.
The Notice to Consumer Debtors included in Mr. Simmons’ petition includes the statement that the provisions of Chapter 11 are quite complicated and any decision to seek Chapter 11 relief should be reviewed by an attorney. This is also true for any individual that seeks relief under Chapter 7 or through a Chapter 13 personal reorganization. If you need financial help, please contact our office nearest to you to set up a free private and confidential consultation with one of our licensed attorneys.