If you're considering filing for bankruptcy in New York, it's important to know which kind of bankruptcy is right for you and which debts can be discharged. Examples of dischargeable debts include credit card debt and medical debt, while examples of non-dischargeable debt include child support, spousal support, student loans and taxes.
Hip-hop star DMX recently found out the hard way that only certain kinds of debt can be discharged in a bankruptcy filing. The rapper reportedly owes $1.3 million in child support, and a White Plains judge dismissed DMX's Chapter 11 filing. A bankruptcy trustee requested the dismissal, saying that DMX (real name: Earl Simmons) wasn't consistent in reporting his assets and income.
Simmons is also involved in contract disputes and owes money to other creditors, but his biggest debt is child support.
The bankruptcy was reportedly filed in 2009, and "unreasonable delays" were also cited in the dismissal. Simmons is now required to wait 18 months before filing for bankruptcy again.
In the meantime, he could lose his share in a house in Mount Kisco. Court records indicate that the property has a $453,000 lien, and Simmons was apparently unable to prove that he insured the home.
Each debt situation requires specific solutions, and New York residents with heavy debt should be aware of which strategy is right for them. Chapter 7 is liquidation bankruptcy, whereby the debtor is able to wipe away unsecured debts. Chapter 13 bankruptcy allows for a repayment plan and the reorganization of debt. Chapter 11 is also reorganization bankruptcy available to businesses and individuals.
If you would like to learn more about reorganizing and discharging debt, our bankruptcy site is a good place to start.
Source: lohud.com, "Rapper DMX's bankruptcy filing tossed," Earnie Garcia, Nov. 8, 2013