[16-Jan-2020] DarksydePhil is filing for bankruptcy (general thread) - and has officially done so on January 31 2020, meaning a lot of his finances have become public

[Martys_not_smarty]

@Comma I take it the next major update to the front page will be for this upcoming Friday as that's the date Midfirst has to be challenged on it's motion to stay and if it isn't then they'll proceed with the foreclosure yes?

 

[myone]

Well its business related so yes.

Nancy: "Mr. Burnell, this is your personal bankruptcy. How can this possibly be business related?
Pig: *snort* Of course it's business related. If I don't get this bankruptcy, I can't pay my bills, I could lose my house, excuse me, my khando, and therefore won't be able to continue my business...

 

[Comma]

@Comma I take it the next major update to the front page will be for this upcoming Friday as that's the date Midfirst has to be challenged on it's motion to stay and if it isn't then they'll proceed with the foreclosure yes?

I'll be updating the OP to the best of my ability, so I'll be adding important/interesting information as it gets posted, yeah. I don't know what the exact consequences are if the motion isn't challenged, but maybe @AnOminous and/or @SoapQueen1 can shed some light on that.

 

[actually]

I'll be updating the OP to the best of my ability, so I'll be adding important/interesting information as it gets posted, yeah. I don't know what the exact consequences are if the motion isn't challenged, but maybe @AnOminous and/or @SoapQueen1 can shed some light on that.

If it's unchallenged, the motion will be granted and Midfirst will be able to pursue their deficiency filing.

 

[AnOminous]

If it's unchallenged, the motion will be granted and Midfirst will be able to pursue their deficiency filing.

They've met any burden they have and it's now up to Phil to counter it. If not, there's no reason it won't be granted that I can see, unless the court holds off on it pending a motion to dismiss, because if the entire bankruptcy is dismissed, lifting the stay is moot. But since the stay motion is calendared first, there's no real reason not to grant it immediately if it isn't opposed.

 

[Martys_not_smarty]

Beat me to it but yeah that's the laymens of it, Midfirst saw that he was filing bankruptcy after the foreclosure and they're going bullshit we want out piece of the pie and we want it separate from said bankruptcy as well as within the timeframe we had originally planned so here's the motion. And in this is where loss of both properties becomes reality, Midfirst will short sale the foreclosure and still be entitled to something like $50k that they can collect in which they see fit including lien.

 

[AnOminous]

Beat me to it but yeah that's the laymens of it, Midfirst saw that he was filing bankruptcy after the foreclosure and they're going bullshit we want out piece of the pie and we want it separate from said bankruptcy as well as within the timeframe we had originally planned so here's the motion. And in this is where loss of both properties becomes reality, Midfirst will short sale the foreclosure and still be entitled to something like $50k that they can collect in which they see fit including lien.

That or maybe more, depending on how short the sale is. Under the circumstances, that could be really short.

They're not necessarily entitled to the full amount of the deficiency, though. The court can give them a haircut, although exactly how much of one is up to Connecticut law. There's generally some nonsense about reasonableness.

 

[FamicomGorby]

So in a bankruptcy like this, does the trustee have to write a decision that specifies why they dismissed a bankruptcy or moved to have it converted to another type?

 

[AnOminous]

So in a bankruptcy like this, does the trustee have to write a decision that specifies why they dismissed a bankruptcy or moved to have it converted to another type?

The judge writes decisions. Anyone else just writes motions asking the court for decisions. Decisions should be supported by facts in the record, at least outside of Judge Chupp's court in Texas, where he just makes shit up. I expect better from a federal bankruptcy judge, though.

 

[harbinger]

Judge Chupp's court in Texas

Completely off-topic, but now I’ll be spending some time in google.

Edit: Not as interesting as I’d hoped, but to get back on topic, Philip’s an idiot.

 

[UncleTusky]

They're not necessarily entitled to the full amount of the deficiency, though. The court can give them a haircut, although exactly how much of one is up to Connecticut law. There's generally some nonsense about reasonableness.

Connecticut law requires MidFirst to take a haircut if they sell the property below assessed value (they'd have to forgive one-half of the difference between the assessed and sale values). The sale is managed by the court rather than the bank but there does not appear to be a "reasonableness" requirement or any appeals process of the sale price, either for the former owner or the bank, once the foreclosure is approved.

One other thing to keep in mind is that foreclosure in Connecticut moves slowly: Here's another property in Phil's town with a sale date of 5 April. The plaintiff filed in June 2019, the judge granted a default judgment in August 2019 because the defendant did not show up, but it still took until January 2020 to finalize the ruling. With coronavirus shutting things down until at least June we may not see a sale of Phil's property until Fall or even next year. On the plus side, if the judge just sits on the foreclosure approval for half a year, Phil's still liable for the HOA fees in the interim.

(Source).

 

[actually]

Connecticut law requires MidFirst to take a haircut if they sell the property below assessed value (they'd have to forgive one-half of the difference between the assessed and sale values). The sale is managed by the court rather than the bank but there does not appear to be a "reasonableness" requirement or any appeals process for the former owner once the foreclosure is approved.

Just to make sure I understand this properly, if the CT condo was assessed at $60k and sold for $50k, Midfirst would only (lol) be able to come after Phil for around $55,000 ($110k on mortgage+fees+interest - $50k sale price - $10k/2 forgiven)?

 

[UncleTusky]

Just to make sure I understand this properly, if the CT condo was assessed at $60k and sold for $50k, Midfirst would only (lol) be able to come after Phil for around $55,000 ($110k on mortgage+fees+interest - $50k sale price - $10k/2 forgiven)?

Yes, that is correct (though I think you're being really optimistic about it keeping its value or selling for $50k when we're heading into a recession-court has to reassess it as part of the sale).

In the off chance it sells at/above market value, there's no adjustment factor-if some idiot paid, say, $70k he'd only be liable for the remaining $40k.

 

[AnOminous]

Connecticut law requires MidFirst to take a haircut if they sell the property below assessed value (they'd have to forgive one-half of the difference between the assessed and sale values). The sale is managed by the court rather than the bank but there does not appear to be a "reasonableness" requirement or any appeals process of the sale price, either for the former owner or the bank, once the foreclosure is approved.

One other thing to keep in mind is that foreclosure in Connecticut moves slowly: Here's another property in Phil's town with a sale date of 5 April. The plaintiff filed in June 2019, the judge granted a default judgment in August 2019 because the defendant did not show up, but it still took until January 2020 to finalize the ruling. With coronavirus shutting things down until at least June we may not see a sale of Phil's property until Fall or even next year. On the plus side, if the judge just sits on the foreclosure approval for half a year, Phil's still liable for the HOA fees in the interim.

(Source).

This is some great homework. Connecticut also has a great handbook on specifically this issue complete with case law:

https://www.jud.ct.gov/lawlib/Notebooks/Pathfinders/Foreclosure_Postjudgment.pdf

At least it's good enough to get started and gives a good roadmap on what's likely to happen.

Apparently they have to file for a deficiency judgment within 30 days of the expiration of the redemption period and the deficiency judgment procedure completely replaces common law and other remedies, so there's no arguing about that kind of nonsense. They just file and then get their judgment.

It looks like they make it really easy on everyone to litigate. It's just, as you point out, half the difference between assessed and sale values. This strikes me as pretty fair.

The breakdown in statute:

“At any time within thirty days after the time limited for
redemption has expired, any party to a mortgage foreclosure
may file a motion seeking a deficiency judgment. Such motion
shall be placed on the short calendar for an evidentiary hearing.
Such hearing shall be held not less than fifteen days following
the filing of the motion, except as the court may otherwise
order. At such hearing the court shall hear the evidence,
establish a valuation for the mortgaged property and shall
render judgment for the plaintiff for the difference, if any,
between such valuation and the plaintiff’s claim. The plaintiff in
any further action upon the debt, note or obligation, shall
recover only the amount of such judgment.” Conn. Gen. Stat. §
49-14(a) (2019).

There's a hard 15 day limit "except as the court may otherwise order," and I'd imagine there's a pretty high likelihood of the court ordering some longer period in light of the current situation. Even if the pandemic has waned by then there will probably still be a huge mess left behind for months to come.

 

[King Daddy Telomerase]

Something was added tonight:

Receipt of filing fee for Motion for Relief from Stay( 20-10323-TWD) [motion,185] ( 181.00). Receipt number A26343134. Fee amount $ 181.00. (U.S. Treasury)

Don't know what this means tbh. Did Phil pay this?

Timothy Dore has been the judge from the start.

 

[BhilPurnell]

Timothy Dore has been the judge from the start.

Didn't remember seeing the name. When I glossed over it and didn't see any updated info I assumed it was a new judge. My bad.

 

[actually]

Something was added tonight:

Receipt of filing fee for Motion for Relief from Stay( 20-10323-TWD) [motion,185] ( 181.00). Receipt number A26343134. Fee amount $ 181.00. (U.S. Treasury)

Don't know what this means tbh. Did Phil pay this?

Pretty sure that's MidFirst paying the filing fee for their motion. @AnOminous, @Beetus Knuckles, @SoapQueen1, can one of you confirm?

Edit: https://www.wawb.uscourts.gov/filing-fees Confirmed here. $181 for filing a motion for relief of stay. Note as well the date on it, which is the same as the date the actual motion (and related docs) were filed by Lance Olsen.

 

[Honzou]

Is there actually a way for bankruptcy to go through without someone ever having to prove their business expenses in detail? I find this mind boggling as someone not from the US. It's such a big factor in qualifying in the first place. Putting numbers on a piece of paper is easy.

 

[AnOminous]

Is there actually a way for bankruptcy to go through without someone ever having to prove their business expenses in detail? I find this mind boggling as someone not from the US. It's such a big factor in qualifying in the first place. Putting numbers on a piece of paper is easy.

A statement under oath is evidence. Once one side has met their burden of producing evidence, the burden is on the side challenging it to present evidence to the contrary.

 

[DarkScrubPhil]

So, I did some number crunching, and I think I've figured out how Phil is coming up with the roughly $5,000 a month business expense figure.

To begin, I am going to assume that he uses 30% of his condo as an exclusive business office (e.g. where he streams from). Further, I am going to stick with the numbers as reported in the bankruptcy papers where possible. I do make a few assumptions about some of his expenses, but I generally make generous assumptions (assume larger than smaller).

His stated Revenue is $9234.53. His variable expenses are his B&O tax, his FICA tax, Paypal fees, and electricity. His B&O tax, FICA tax, and Paypal I have calculated to be $138.52, $678.74, and $277.04 respectively. His electricity was listed in his bankruptcy papers as $150. Multiply that by 30%, and that leaves $45 as his business expense. The total for his variable expenses is $1,139.29.

Moving on to his fixed expenses, we start with his mortgage which is stated to be $1,830. Multiply that by 30%, and you get $549. His cable internet I'm assuming that he's using exclusively for his business I'm estimating to be about $200. I'm assuming that he's buying the equivalent of 5 AAA titles a month and at $60 a game, that comes out to $300. For the annual expenses, we have the XBox, PSN, and Nintendo Switch Online, which is $60, $60, and $20 respectively for a total of $140 a year or $11.67 a month. I'm also going to assume he spends $600 a year on equipment (remember, I'm being generous here) such as new consoles, TV, controllers, etc. and it makes for easy math). That comes out to be $50 per month. Totalled for a monthly basis, Phil's fixed expenses total out to be $1,110.67.

His total expenses are $1110.67+$1,139.29 = $2,249.96. This means his net income is $9,234.53 - $2,249.96 = $6,984.57 or roughly $7,000. He's overstating his expenses by about $2,000 and understating his net income by $2,000.

So how is Phil getting to $5,000? By allocating 100% of his electricity and mortgage payment to his business expenses. I also think he's double dipping by putting those expenses along with the personal expenses, and he's left with $35.