November 24, 2017

Sinbad Bankruptcy? News Reports Get it Wrong

According to news reportsSinbad does not file Chapter 13 coming from literally hundreds of outlets, comedian Sinbad has filed a Chapter 13 bankruptcy.  The source of this report is the web site 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 jurisdictional limits for Chapter 13.1

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. [Read more…]

  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.

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