Related questions
At any rate, I'd be very interested to hear the reasoning of some of the people betting that he's going to be worth millions of dollars. Do y'all seriously believe he's going to 1) avoid prosecution AND 2) start a new scheme within 3 years AND 3) have new suckers falling for it AND 4) avoid having to pay it all to creditors from his previous scheme?
@sbares I'm not confident you really can have negative money - wouldn't you just declare bankruptcy at that point and get reset to zero? I don't know much about bankruptcy so maybe I'm misunderstanding things.
@SpencerGreenberg Debts incurred by criminal activity are generally not covered by personal bankruptcy.
@sbares oh okay, so I suppose if someone ends up $1 billion in debt a judge would give them some kind of payment plan where - as they earn income - some amount would have to go to creditors each month?
@SpencerGreenberg In a Chapter 13 case, you typically come up with a 3 year (partial) repayment plan, based on income. Possibly up to 5 years in some circumstances or even longer if the bankruptcy is "for cause".
More drastic means, like Chapter 7 may well be closed to the negative billionaire debtor, because they rely on tests of income against the state median and the like, and it may otherwise be classed as "abusive" misuse. This "abusive" test above can be particularly bad if the debtor is also suing other entities so there is a possibility of other incoming funds to feed their creditors.
The tl;dr is you can easily wind up in the negative by an amount the judge feels you have any chance of paying off in a small number of years, and the test for that is often based on your most recent few years income, and so may well exceed the means of the debtor in practice if poorly calibrated, and the numbers rarely are well calibrated.
As someone who lived a much scaled down version of this, you can go significantly negative through those proceedings!