Another entertainer has filed for personal bankruptcy. Baltimore-born rap singer DMX filed a petition for Chapter 11 bankruptcy at the end of July. Chapter 11 is more often used in business bankruptcies, but the option is also available to individuals.
According to court documents, the rapper currently has less than $50,000 in assets and debts totalling somewhere between $1 million and $10 million. He chose Chapter 11, the record shows, because he wants to reorganize his financial affairs. Unpaid child support — an estimated $1.24 million — accounts for a good portion of his debt. Court filings also listed a $21,000 auto lease.
Like most of us, his principle asset is real estate. He owns property in Westchester County, New York.
After various news outlets reported on the bankruptcy filing, the star’s representative issued a statement that provided some context for the petition. DMX, whose given name is Earl Simmons, has been experiencing financial woes for a few years, the statement said. He had directed his financial manager to take care of his child support payments, the representative explained, but the manager failed to do so. That manager is no longer in DMX’s employ.
As a result of that mistake and others, DMX now finds himself without a passport, and without a passport he is unable to tour abroad. A European tour could help to get his finances back on track. (The U.S. government will not give a passport to anyone who owes more than $2,500 in child support.)
The singer’s child support obligation will not change under any bankruptcy plan. Bankrutcy could, however, help him renegotiate other debts so that he would be able to clear up back child support and make timely payments in the future.
Source: Wall Street Journal, “Rapper DMX Files for Bankruptcy,” Jacqueline Palank, July 30, 2013