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DarksydePhil / TheyCallMeDSP / Phil Burnell declared bankruptcy under Chapter 7 on January 31, 2020 two weeks after announcing he was in the process of doing so.
The filings with the court can be seen and downloaded here. The documents are also attached.
Under Chapter 7 a person with less than the median income in their state for a household of their size (yes, his wife's income is counted) can have their unsecured (credit cards, personal loans, etc) non-priority (not taxes, not child support, not student loans) debt discharged fairly quickly compared to the years or lifetimes it would normally take to pay them pay off. The catch is that the debtor has to sell their non-exempt assets first. There are federal and state rules about what assets are exempt and the debtor can chose which set of rules to use but cannot cherry-pick individual rules out of the sets. DSP is using the exemptions for the state of Washington. These exemptions can be found here and include the following: $125K equity in a primary residence and $3,250 equity in a vehicle or $6,500 equity in two vehicles for a married couple.
The first glaring issue with DSP's filing is that he identifies approximately $16K equity in his vehicle and somehow wants to engage in an agreement to keep it. My understanding is that he is required to allow the trustee to sell it because he has too much equity in it. The second issue is the lowball estimate of his Washington condo's value. The filing indicates Zillow estimates its value at $379K but Zillow hasn't estimated its value at that amount since four years ago in January 2016 and its value has continued to increase since then. Zillow currently estimates it's worth $410K, and both Redfin and Realtor.com suggest a similar unit in his gated community is worth $413-414K minimum. Realtor.com even goes so far as to say it could be worth up to $456K. Several similar units in DSP's gated community have sold for between $385K and $555K in the last half of 2019. Not only is this sloppy work in the filing it's a material misrepresentation because it affects whether or not his condo must be sold under Chapter 7.
Assuming it sells for $410K, he can deduct the following from that sale price to determine what amount of that value is non-exempt:
The third issue is a mysterious claim of $5,200 in average monthly business expenses. DSP is an extremely low production-value Twitch streamer and only uploads 1 hour chunks of his raw stream archives to YouTube. I cannot fathom how he spends more than a tenth of that number each month on ordinary and necessary business expenses. It's highly likely he is classifying the entirety of his personal income taxes, his Washington condo expenses as business expenses which is at worst bankruptcy fraud and perjury. If he's claiming these things are business expenses to the court and not the IRS the court will almost certainly find out and his petition could be denied with prejudice meaning he cannot try again for years.
There are a number of other issues with the filing including DSP stating he doesn't run or own a business (including a sole proprietorship) when he later identifies income from and expenses for a business he runs, not identifying where he and Kat live for some reason writing "- NONE -" for the state and leaving the address blank, claiming he owns no electronics, claiming he owns no collectibles, etc.
DSP claims he has $600 in cash and $460 in checking at the date of filing. A summary of the fully unsecured debt DSP has at the time of filing follows:
DSP's filing demonstrates that the efforts to tally up his monthly income have been extremely accurate despite him calling people mentally ill stalkers who are completely wrong.
The filings with the court can be seen and downloaded here. The documents are also attached.
Under Chapter 7 a person with less than the median income in their state for a household of their size (yes, his wife's income is counted) can have their unsecured (credit cards, personal loans, etc) non-priority (not taxes, not child support, not student loans) debt discharged fairly quickly compared to the years or lifetimes it would normally take to pay them pay off. The catch is that the debtor has to sell their non-exempt assets first. There are federal and state rules about what assets are exempt and the debtor can chose which set of rules to use but cannot cherry-pick individual rules out of the sets. DSP is using the exemptions for the state of Washington. These exemptions can be found here and include the following: $125K equity in a primary residence and $3,250 equity in a vehicle or $6,500 equity in two vehicles for a married couple.
The first glaring issue with DSP's filing is that he identifies approximately $16K equity in his vehicle and somehow wants to engage in an agreement to keep it. My understanding is that he is required to allow the trustee to sell it because he has too much equity in it. The second issue is the lowball estimate of his Washington condo's value. The filing indicates Zillow estimates its value at $379K but Zillow hasn't estimated its value at that amount since four years ago in January 2016 and its value has continued to increase since then. Zillow currently estimates it's worth $410K, and both Redfin and Realtor.com suggest a similar unit in his gated community is worth $413-414K minimum. Realtor.com even goes so far as to say it could be worth up to $456K. Several similar units in DSP's gated community have sold for between $385K and $555K in the last half of 2019. Not only is this sloppy work in the filing it's a material misrepresentation because it affects whether or not his condo must be sold under Chapter 7.
Assuming it sells for $410K, he can deduct the following from that sale price to determine what amount of that value is non-exempt:
- the homestead exemption: $125K
- trustee commissions: $17,500
- realtor commissions (the filing claims it will be 9% of the sale price): $36,900
- amount owed on the mortgage: $227K
The third issue is a mysterious claim of $5,200 in average monthly business expenses. DSP is an extremely low production-value Twitch streamer and only uploads 1 hour chunks of his raw stream archives to YouTube. I cannot fathom how he spends more than a tenth of that number each month on ordinary and necessary business expenses. It's highly likely he is classifying the entirety of his personal income taxes, his Washington condo expenses as business expenses which is at worst bankruptcy fraud and perjury. If he's claiming these things are business expenses to the court and not the IRS the court will almost certainly find out and his petition could be denied with prejudice meaning he cannot try again for years.
There are a number of other issues with the filing including DSP stating he doesn't run or own a business (including a sole proprietorship) when he later identifies income from and expenses for a business he runs, not identifying where he and Kat live for some reason writing "- NONE -" for the state and leaving the address blank, claiming he owns no electronics, claiming he owns no collectibles, etc.
DSP claims he has $600 in cash and $460 in checking at the date of filing. A summary of the fully unsecured debt DSP has at the time of filing follows:
- $15K to the IRS from 2018 back taxes
- $7,550 to American Express across two accounts
- $26,038 to Bank of America
- $2,741 to BMW (somehow after ending his lease in mid 2017)
- $10,751 to Capital One
- $14,100 to Chase
- $37,994.74 to Citi across three accounts
- $10,053 to Discover
- $9,397 to a peer-to-peer lending group called Lending Club
- $4,355 to a peer-to-peer lending group called Proper Marketplace
- $3,819 to Sam's Club
- $4,751.54 to to US Bank
DSP's filing demonstrates that the efforts to tally up his monthly income have been extremely accurate despite him calling people mentally ill stalkers who are completely wrong.
| Month | Income Estimation | DSP's Reported Income |
|---|---|---|
| July 2019 | $8,088.80 - $9,776.80 | $8,219.30 |
| August 2019 | $10,900.83 - $12,628.83 | $10,104.07 |
| September 2019 | $8,065.21 - $9,589.21 | $8,222.24 |
| October 2019 | $9,876.88 - $11,428.88 | $9,864.26 |
| November 2019 | $8,707.72 - $10,363.72 | $9,768.23 |
| December 2019 | $9,273.65 - $10,937.65 | $9,229.10 |
