If an individual who possesses a million-dollar home declare personal bankruptcy, it seems only rational that she or he would be legally required to offer that house, find more modest cottages, and utilize earnings from the sale to repay creditors.
Not in Kansas.
The Sunflower State is among 7 where the bankruptcy laws supply unrestricted homestead exemptions. If you submitapply for bankruptcy and have lived in Kansas for at least 40 months, you get to keep your house no matter how pricey it is. Kansas: a terrific location to go belly up and keep your swimming pool!
Matthew Kirks recent bankruptcy filing reveals simply how much the state respects its citizens way of lives. That is, it exposes how backward and abusable Kansas homestead exemption is.
Kirk, as The Pitch has actually reported, was among the creators of ClickSpeed, a lead-generation business for online payday lenders. Kirk and his ClickSpeed co-founder, Herb Sih, offered loan applicants individual info to predatory lenders, numerous of whom have been prosecuted by different states and the federal government for prohibited financing. (Kirk also co-owned a payday-loan call center called ClearVox, and he was amongst the initial owners of Centrinex, also a payday-loan call center.)
The online-payday-lending market prospered in the shadows right here for much of the previous decade. Millions and millions of dollars were made by expanding microloans to the well-being class with 700 percent rate of interest and hidden charges. And those millions didnt flow solely to the lenders. Likewise raking in the dough were people such as Kirk and Sih, whose companies made the loan providers work very easy.
In 2013, however, the feds caught on and began pressuring banks to stop processing deals to and from shady online lenders. This gutted the industry and left numerous regional millionaires overleveraged. Two years later, their bills are overdue, and suits versus them are flying. So bankruptcy filings are starting to land.
After Kirk closed ClickSpeed in 2013, he rented office areaoffice in Leawoods ritzy Park Location advancement and started exactly what he billed as a Web marketing business: Oceanus Digital. According to Kirks bankruptcy report submitted July 15, 2015 Oceanus has actually operated at a loss given that its inception. Kirk, who possesses 100 percent of the company, owes nearly $300,000 to VanTrust Property, his Park Location property manager. (Responding to an e-mail to verify this part of Kirks filing, Jeff Smith of VanTrust tells The Pitch: Certainly this [the $300,000] relates to the lease and we do not make comments to others about a lease between one of our entitys [sic] and an occupant.)
ClearVox, which Kirk holds a 60 percent stake, is also operating at a loss. It has no considerable possessions proclaimed on the bankruptcy filing, which also shows that the business has transferred to downtown Kansas City presumably to the workplaces of Think Big Partners, as The Pitch reported in June where it uses three individuals. Flus Medios, a Panamanian business of which Kirk has half, has debts in Panama and has constantly operated at a loss. It stopped business operations in July. And 4 other companies that Kirk is included with likewise have no value, according to the filing.
In addition to the Park Location debt, Kirk lists another $200,000 in financial obligation to EHD Holdings, a previous ClickSpeed proprietor that has submitted a claim against Kirk in Johnson County. Other creditors called in the filing consist of Chase Bank and American Express (charge card); Stinson Leonard Street LLP (legal bills); and member charges at a yacht club in Fort Myers, Florida.
In overall, Kirks bankruptcy filing lists liabilities of $637,607.76.
This past March, Kirk sold his $1.5 million Overland Park home and bought a new one worth $725,000. The purchase price was a trade for his current residence plus roughly $765,000, according to the filing. He likewise offered his Fort Myers condominium for $315,000 and sold off $85,000 in stock in Union Broadcasting (owner of Sports Radio Station WHB 810).
Still, as signified in the filing, Kirks exempt assets the $725,000 house, a 2007 Lexus worth $16,500, numerous home items and a 401(k) amounttotal up to $839,241.31. Thats more than $200,000 over his stated debt.
What kinds of laws enable an individual to rack up more than $600,000 in financial obligation, not pay it back, and continue to stay in a home worth three-quarters of a million dollars? Not the kinds in result for, state, student-loan borrowers, for whom bankruptcy is not a choice, and who face liens on their houses if they default on their payments.
Kirks bankruptcy lawyer declined to comment. Kirk could not be grabbed remark. According to the bankruptcy filing, he has actually made $1,960 so far this year as an Uber driver. He has actually told the bankruptcy court that he wishes to ultimately make $6,000 a month working for the ride-share business.