According to news reports href="http://www.thebklawyer.com/thebkblog/wp-content/uploads/2013/05/22/sinba..."> class=" wp-image-1254 alignleft" style="margin: 4px;" title="Sinbad bankruptcy reports incorrect" alt="Sinbad does not file Chapter 13" src="http://www.thebklawyer.com/thebkblog/wp-content/uploads/2013/05/22/sinba..." width="328" height="234" /> coming from literally hundreds of outlets, comedian Sinbad has filed a title="Chapter 13 bankruptcy" href="http://www.atlanta-bankruptcy-attorney.com/faq/research-center/making-th..." target="_blank">Chapter 13 bankruptcy. The source of this report is the web site href="http://www.tmz.com/2013/05/20/sinbad-broke-bankrupt/" target="_blank" rel="nofollow">TMZ.com – and news outlets from major news networks to gossip web sites are re-writing and re-reporting the TMZ story.
There’s only one problem with the TMZ story – it is not factually correct. There is no way that Sinbad could qualify for Chapter 13 given the type of debts he owes.
If, as has been reported, Sinbad owes American Express $374,979 and Bank of America, $32,199, his unsecured debt exceeds the jurisdictional limits for Chapter 13. If you consider IRS debt of more than $8 million, Sinbad far exceeds the title="Chapter 13 debt limits" href="http://www.thebklawyer.com/thebkblog/chapter-13-debt-limits/">jurisdictional limits for Chapter 13. class='footnote'> href='#fn-1252-1' id='fnref-1252-1' onclick='return fdfootnote_show(1252)'>1
I am guessing that Sinbad actually filed Chapter 7, which means that any hard assets or intellectual property he owns could be at risk. This element of the story could be an interesting read but we may never know. id="more-1252">
While the type of bankruptcy that Sinbad has filed may not make much difference to most readers, the inaccuracy of the news reports does underscore an important point. First, you should not accept at face value anything you read in the newspapers or online about bankruptcy. Despite this glaring inaccuracy, it appears that dozens of news outlets simply accepted what they read on an entertainment web site (TMZ).
And TMZ is not alone. Inaccurate information about bankruptcy exists all over the Internet. For example, Nolo.com which is a widely used and respected web site about legal topics, currently has title="NOLO incorrect exemption" href="http://www.nolo.com/legal-encyclopedia/georgia-bankruptcy-homestead-exem..." target="_blank">posted on its web site the following paragraph:style="padding-left: 60px;">Under the Georgia exemption system, homeowners may exempt up to $10,000 of their home or other property covered by the homestead exemption. You can also apply $5,000 of any unused portion of the homestead exemption towards any property you own. This is commonly referred to as a wildcard exemption. style="padding-left: 60px;">For example, let’s say your house is worth $100,000. If you have a $90,000 mortgage on the property, then you have $10,000 of home equity. If you file bankruptcy, your equity will be fully exempt under the Georgia homestead exemption. This means that your creditors can’t touch your equity and you can keep your home.
Unfortunately, this information is completely inaccurate – Georgia changed its exemption limits in 2012 – now an individual can exempt $21,500 of equity in real estate. class='footnote'> href='#fn-1252-2' id='fnref-1252-2' onclick='return fdfootnote_show(1252)'>2 If you were relying on the Nolo.com site or another site that gets its information from Nolo, you would be relying on bad information to make your decision about filing bankruptcy. class='footnote'> href='#fn-1252-3' id='fnref-1252-3' onclick='return fdfootnote_show(1252)'>3
Secondly, just because a news report is repeated over and over as fact does not make it so. Law school teaches aspiring lawyers to critially read and consider every word of a document. This is why contracts and other legal documents are so long and complex. The news media deals with sound bites. The TMZ staffer who put out the Sinbad story threw in “Chapter 13″ without knowing any better and now this misstatement has been spread all over the world.
So, whether you are considering bankruptcy or any other legal matter, do your research and ask questions. Talk to a lawyer and do not rely on what you read on any web site because that information could be wrong.class='footnotes' id='footnotes-1252'>
id='fn-1252-1'>Section 109(e) of the Bankruptcy Code provides that Chapter 13 debtors may have no more than $383,175 of unsecured debts. Sinbad’s credit card debt alone totals more than $407,000.
title="Georgia exemption statute" href="http://www.atlanta-bankruptcy-attorney.com/faq/research-center/protectin..." target="_blank">Click here to read the Georgia exemption statute.
id='fn-1252-3'>Nolo.com offers a lot of useful information about the law to consumers but a site this massive can be hard to keep updated.
The post href="http://www.thebklawyer.com/thebkblog/2013/05/22/sinbad-bankruptcy-news-r...">Sinbad Bankruptcy? News Reports Get it Wrong appeared first on href="http://www.thebklawyer.com/thebkblog">theBKBlog.