Bankruptcy should be a smooth process. If a person is honest about assets and finances, they will likely be able to pay back creditors with a repayment plan under Chapter 11 -- or, in a Chapter 7 case, liquidate assets to erase debt. Unfortunately, bankruptcies don't always play out as smoothly as they should, often because of inconsistencies on the debtor's part. By avoiding these inconsistencies, a debtor can complete filing for bankruptcy, erase most if not all of their debt within a few years, and get a fresh financial start in life.
Arizona fans of DMX may be surprised to learn the actor-slash-rapper is going through some struggles with his personal bankruptcy. Allegedly, the Romeo Must Die star left a number of inconsistencies in his court filings, neglecting to list some of his assets including the amount he spends on clothing each month, and listing two different amounts for his monthly income in his court filings.
DMX originally filed for a Chapter 11 bankruptcy, which would allow the rapper to pay off his debt in a repayment plan. After a Justice Department official's urging, the case was then converted to a Chapter 7 liquidation, which would allow DMX to pay back his debt by liquidating his assets. Now, because of the inconsistencies found in his court filings, DMX could potentially be barred from bankruptcy altogether.
Inconsistencies are easily avoidable if a person is thorough and honest in their court filings. A trustworthy legal professional can help with this, and ensure that a bankruptcy proceeding goes as smoothly as possible so debtors can move on with their lives.
Source: The Wall Street Journal, "DMX in Hot Water with Bankruptcy Watchdog," Jacqueline Palank, Oct. 22, 2013