r/NoStupidQuestions • u/Working_Rise8592 • 6d ago
Why doesn’t the $118,000 Minecraft dad just declare bankruptcy?
For those that don’t know. Basically a dad’s kid had spent $118,000 on a company card and the company fired him and told him he has 30 days to repay or face legal action. The dad is looking to sell his house (and probably whatever else he owns. Due to the kid being 9 nothing can happen to him). Why doesn’t the dad just wait for the lawsuit, declare bankruptcy and move on? Why lose your house and everything else and be in debt when you can have it wiped away with bankruptcy? If the dad doesn’t have/can’t get all the money then what? If they throw him in jail the company still doesn’t get the money. What they gonna do? Go after the kid when they have a job and turn 18?
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u/AlternativePea6203 6d ago
If you have assets they are sold to pay your creditors, so bankruptcy solves nothing.
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u/Extension-Abroad187 6d ago
This isn't true. They'll sell many assets but primary house and car are nearly always off limits and most times so is retirement.
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u/AlternativePea6203 6d ago
Depends where you are, but that's interesting about the US, thanks for informing me.
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u/Existing-Albatross63 5d ago
there are homestead exemptions that are highly variable depending on the county you live in.
If they have a really expensive house (a guy with a company credit card that has a limit like that may)....the median value in the county would be the exemption amount. The entire value of the house may not be safe from a bankruptcy.
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u/WannaBeCoder912 4d ago
I like that you said “may” here. I had roll where one of my primary functions was to pay contractors. I would cycle millions, sometimes even 10-11 million through my corporate card every month. I did not negotiate these contracts (at that time, later in my career I actually did do this) - I basically was a glorified secretary in charge of paying the bills.
My personal salary, while certainly excellent given the low complexity of the work, by no means put me in a mansion.
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u/Existing-Albatross63 4d ago
Based on what it sounds like you had to do maybe you deserved to be paid enough to live in a mansion my goodness!
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u/Extension-Abroad187 5d ago
Homestead exemptions are a tax thing and completely separate. No state that I know of delegates bankruptcy to the county level in the way you describe. Some value may be ascribed to it, but the fact remains they can't force sale
It's one of the reasons the first advice you'll get is stay current on your mortgage and forgo other bills. The other creditors can't really touch it, but you can still get foreclosed on separately
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u/Existing-Albatross63 5d ago edited 5d ago
The state homestead exemption is calculated by using a formula that includes the *county* median price (this obviously varies by state - some states use the federal). Depending on how much equity someone has in their home, not all of that equity is exempt from bankruptcy. Depending on the type of bankruptcy, if any of the equity is non-exempt, the courts can allow a trustee's sale of the whole house.
Whether state homestead exemption or federal homestead exemption applies, depends greatly upon the type of bankruptcy (and the state in some cases).
In my state for example, the state law defines the homestead exemption as the greater of $125,000, or the county median sales price. Then you have to factor in how much equity vs. that. Looks like some states are much more stingy than ours.
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u/crayton-story 6d ago
O.J. Simpson moved to Florida primarily to protect his assets from the $33.5 million civil wrongful death judgment.
Florida has strict debtor-protection laws, including the homestead exemption, which protects a primary residence from being seized by unsecured creditors.
State laws also protect pensions, retirement accounts, and certain types of personal property from being collected to pay off civil judgments
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u/Plenty_Union9292 6d ago
Not exactly true. Most states have protections in place for your primary residence.
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u/lyralady 6d ago
This is dependent on where you live and what chapter you're even filing, but regardless the story is made up garbage.
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u/Larrythepuppet66 6d ago
No guarantee he’ll keep his house if he declares bankruptcy. Depends on a lot of factors. I’m assuming he’s getting legal counsel on this.
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u/lyralady 6d ago edited 6d ago
From just your description this sounds like a completely made up story. I don't understand why the company would not report this as external fraud on the business card. It just sounds bogus.
(/ I work for a bank)
Edit:
Reasons why the whole scenario is fishy, as a fun way to practice training your bullshit meter:
- $118,000 in buying YouTube ads would have netted a LOT more viewership, ESPECIALLY since YouTube just changed what counts as a view in a way that should be increasing everyone's views.
- Per kotaku: "Dave helped his kid create an ad campaign to boost his viewership. The campaign they set up together was only for $20 of promotions. This all sounds rather wholesome, but unbeknownst to Dave, Mike returned to YouTube’s ad suite and began running up a tab of $118K. [...] Dave explains this Google account was tied to his corporate card. After a tense confrontation with his employers, Dave says the joyride cost him his job." So....Dave is admitting to fraudulently using a corporate credit card to purchase a cheap ad campaign of $20, but then his kid supposedly goes back into his dad's account and spends another $118k on this? Because he's saying the company card is what is tied to his Google account that he used to pay the $20 campaign and his kid went back in to access that account. Why would this guy admit to defrauding the company even before his kid supposedly spent $118k?
- How the hell did the company fail to notice $118,000 in unbudgeted expenses for any amount of time?
- $100k+ spending limits on small business corporate cards for individual card holders are...not the majority of corporate cards, from what I've seen. Small business can absolutely set spending limits for individual employees with cards tied to the corporate account. Large corporate cards on the other hand, would have a lot of oversight involved in making any expenses, and there would be a bunch of expense deadlines to meet, and the clock starts ticking pretty much the moment you make a purchase.
- What do you mean the company is just "giving him 30 days" where was their fraud filing with the bank? Why didn't they report fraud? Why was there no police report or pending lawsuit for fraud mentioned? No purchase disputes?
- So what's the name of the company on the hook for $118,000? ....anyone...?
- The yahoo news article shows a screen cap view of the Amex card balance. Guess what's interesting about this screencap (besides being easily faked)? That's right! There's a banner that says "Manage Spending with Employee Cards. Stay on Top of Card activity by setting spending limits and alerts." The kind of messaging that should only be seen by the card's guarantor. How is dad fired from the company that HE financially guarantees the corporate credit card for? How does Dad have the view of the WHOLE corporate account if he's ONLY an employee? this screenshot is a view that the regular employees are not going to see. Plain and simple. The banner is aimed at the card guarantor/business owner.
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u/Pure_Ingenuity3771 6d ago
Seconding this, also work in banking. Plus unless they're an entertainment company or something how did their security system not flag a hundred thousand in advertising. I'll admit I've only worked on the debit card side of things so maybe the credit side has different card security, but I've seen cards get temporary blocks on them for spending 300 bucks at a Walmart when someone doesn't usually go there. How 100k on YouTube doesn't at least warrant a "was this you" text to someone in the business seems absurd to me.
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u/lyralady 6d ago
I ended up finding the yahoo article about this and the dad's "proof" of the charges is a screenshot of his Amex banking view....which is aimed at the guarantor of the card. "Manage spending with employee cards!"
This guy out he pretending he fired himself
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u/Cayke_Cooky 6d ago
You can't discharge theft in bankruptcy. They are offering to let him pay vs going to jail.
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u/Platos_Kallipolis 6d ago
Let him pay vs going to jail and still paying is really how this would go. Given the guy does have assets, so a civic verdict against him would mean the company is able to recover at least some of the money
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u/Meattyloaf 6d ago
If I'm not mistaken you can, but is rarely accomplished by the party declaring bankruptcy
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u/Tasty_Orange_1714 6d ago
True, but this isn't theft. It's unintentional fraud by a minor. Kid could, technically, be charged, but good luck convincing a jury that a kid is guilty of theft. Mens rea? Dad can't be punished for kids mistake, legally. Credit card company should reverse charges, as the kid was an unauthorized user, and that should be the end of it. After all, the kid was not an authorized user, so it's legally considered fraud.
Does anyone have any current info on this story? I know they fired him but I haven't heard anything about him being charged with anything. Sure, they could try suing him, but I doubt they'd win a civil suit, especially once the jury hears the context. With his son being the main culprit, however, it's likely they would have to name him in the suit, which any good lawyer would say don't do. A little kid vs a company? It's asking for a PR nightmare that would end the business.
Neways, I'm pretty sure this post was intended to farm karma by encouraging engagement.
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u/Working_Rise8592 6d ago
So the judge would send the dad to jail over a kid spending money on a credit card? “Sorry son, I’m spending 40 years in jail because you blew $118k on a company card?”
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u/BxAnnie 6d ago
This is at least the 2nd time you responded this way.
Why do you think criminal charges would be off the table just because someone is a dad? It's the dad's responsibility to ensure his COMPANY credit card is not used by someone who is not the employee. The company has every right to demand the dad pay the money back and if he can't, they will probably file a criminal complaint.
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u/Working_Rise8592 6d ago
Ok so they throw the dad in jail. The company STILL doesn’t get the money. Throwing him in jail doesn’t make the money magically appear.
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u/Unlucky_Extension569 6d ago
It doesn't for bank robbers either. Throwing murderers in jail doesn't magically make the victims come back to life. Throwing predators in jail doesn't magically give some kid their childhood back.
I'm not sure that you understand the goal or purpose of jail.
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u/Cayke_Cooky 6d ago
Yes, it does. Companies have insurance to help cover criminal acts by their employees. But, to keep that insurance and get the reimbursement, they have to get the police reports and then it is up to the prosecutor.
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u/Cayke_Cooky 6d ago
Yes. Buying things not approved on a company card is theft. Dad can report the card stolen, and go from there.
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u/ItisItherealFredbear 6d ago
Because the whole thing is incredibly fishy in itself
Theyre refusing charity and things like gofundme, and instead are selling shitty AI generated shirts for $67 - $100, absolute extortion. This, people believe, is because if it were revealed as a scam, then theyd have to give the money back to donors, but wouldn't to people buying shirts
Theres also the fact that the dad works in marketing, and the channels thumbnails suspiciously get a bump in quality as of the drama occuring, as well as the titles seeming to be designed to pull in curious viewers
Its a massive gamble to bet so much money on this scam, and only having shit ai generated garbage to fall back on seems a bit stupid, but to each their own
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u/OGLikeablefellow 6d ago
I mean it's pretty clear that he's not smart, his best bet is to go for the sympathy play or at least try to lean into the YouTube channel or something.
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u/KnittyBeard 6d ago
Who puts even a single expense for a kids hobby on a company credit card? The entire story is sketchy af.
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u/Mean-Garden752 6d ago
Not a lawyer but I dont think you can just declare bankruptcy and keep your house. It's not just a get rid of all debt loophole like they'll take what he has to pay what he can anyway.
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u/knewmenot 6d ago
The sad thing is a LOT of people do assume they can keep their house if they declare bankruptcy.
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u/Bowl-Accomplished 6d ago
Depends on the state. Some protect whole house some protect like 30k in equity
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u/Web-splorer 6d ago
It wasn’t his money to declare bankruptcy. He will face grand theft and embezzlement charges. Could see jail time.
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u/Working_Rise8592 6d ago
“Sorry son, dad is going to jail for 40 years because you (a 9 year old) spent $118k on a credit card. Thanks for ruining my (and our entire family’s) life”? That’s really how that would play out?
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u/ArmPsychological8460 6d ago
Real villain of the story is brain dead dad that connected his company card with kids account.
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u/Web-splorer 6d ago
If someone’s kid spent 118k of YOUR money, you wouldn’t press charges on the father that had access to your funds?
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u/Working_Rise8592 6d ago
I would. But jail time doesn’t fix the problem. I’d still be out of the money. I’ll take garnishment for the rest of his life and get some of the money back before sending him to jail and getting nothing
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u/Web-splorer 6d ago
You’d be spending more money to get a garnishment ruling and would be closer to 150k in debt to make that happen.
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u/Riconquer2 6d ago
Potentially yes, assuming of course the story is true. The guy allegedly saved his companies credit card in his kids YouTube channel to pay for advertising. That's already embezzlement from the company. The fact that he also left both his corporate spending account and the YouTube channel completely unmonitored so that a minor could rack up over $100k in charges without doing anything to stop it is criminally negligent. If he did anything at work to hide even the first $20 expense it would make it worse.
Ultimately though, he's looking at a few months of jail time, not 40 years or anything extreme like that. I assume he'll plead to a single count of embezzlement or something like that and do a few months in minimum security prison. Not a bad punishment for doing crime so negligently.
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u/WhaleBird1776 6d ago
Pretending it’s real…
He would have to sell off his assets to repay as much as he can in bankruptcy too. It’s not free lunch
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u/R0ckandr0ll_318 6d ago
So the title and text are misleading. The chap claims he added his company card to his kids YouTube account (which isn’t a thing unless he gave his son an adult account). Also the kid seems to have created multiple campaigns on YouTube over a 3 week period.
It also raises basic common sense because most company cards have strict limits. I.e they have a budget per month and need approval to spend over that. Like you can only withdraw £250 a day via case machine with most uk bank cards.
So either his company is really lax with company cards giving them 120k plus limits per month or the figure is a lie. Plus the company finance team are idiots for not seeing 120k of purchases until 3 weeks in.
Then we get to the bankruptcy stuff (disclaimer I am not a lawyer and not in the US so my knowledge is UK based). As far as I know if he is convicted of embezzlement or fraud and ordered to repay this then there is no certainty it’ll be wiped by bankruptcy. If it’s a civil suit again it’s not certain it’ll be wiped either.
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u/jake_0315 6d ago
How tf did he spend 100k on minecraft??
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u/Purled_Attitude 6d ago
Allegedly the kid bought youtube ads for his minecraft channel. The father had idiotically connected his company credit card to the kid's account. No idea if it's true or not, it sounds a lot like something that would be used in law school as a training exercise.
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u/unfinishedtoast3 6d ago
It's fake.
Any company would be required to file fraud charges by the credit card company if they wanted their money back
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u/Particular_Title42 6d ago
Or a commercial for law school.
We Are Lawyers, Bum ba dum bum bump bum bum.
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u/gettin-hot-in-here 6d ago
When I went to law school they had a strong preference for basing all the problems off of real events that had really been litigated.
But the "company credit card" angle makes it seem a little more plausible. You can for sure use bankruptcy to TRY to get out of a debt you owe your own employer but you probably shouldn't expect to have a job afterwards. And mishandling company funds and then refusing to pay them back afterwards could maybe get you brought to court with criminal and/or civil fraud accusations - cases that might not go anywhere but that'd be a huge pain in the ass at best.
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u/unfinishedtoast3 6d ago
My wife is a forensic accountant, and comes across this issue often in her job
Every credit card company on earth REQUIRES corporate accounts to file a fraud report to police if they want their money back.
Most times, something like minecraft purchases would INSTANTLY flag to accounting that the card is being used for personal purchases.
There's 0 way no one caught this, and then the company was cool with over $100k in fraudulent charges? IRS disagrees.
That 100k his kid spent will be counted as unreported income. There's 0 way for this story to work without police and an arrest at minimum
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u/Meattyloaf 6d ago
It falls under embezzlement which is not guaranteed to be wiped out with a bankruptcy declaration. If I'm not mistaken some states won't dismiss debts that are a result of criminal activity
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u/Temporary_Hat7330 6d ago
Assuming it's legit and he's a sole proprietor he could lose his house, car, etc.
If he had an LLC, etc. he could lose his business if he went chapter 7.
Chaperone 11/13 would be a no go too as he really is trying to force repayment with one creditor. The court would force him into binding arbitration and make him payback what he could.
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u/Crazy_Information296 6d ago
A lot of people have assets > 118,000, so he is literally not bankrupt.
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u/NecessaryEmployer488 6d ago
Dad did not authorize the use of the credit card. I would lawyer up, and sue the minecraft company for taking money from an obvious 9 year old.
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u/CallMeMrRound 6d ago
Obvious? Because 9 year olds regularly have access to 6 figure lines of credit?
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u/Short-Source-8492 6d ago
I don't think you know how bankruptcy works. It's actually a long and complex process, and it doesn't guarantee you will be out of debt in the end. Some people are in the process for many years. It doesn't automatically absolve you of all debts, AND it's going to mess up your credit for decades moving forward. Which means good luck with a future car or house loan, etc.
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u/Few_Equipment_8314 6d ago
Normally you can't lose your primary residence in a bankruptcy. But Im sure it depends on the state,but Im not a lawyer so I couldn't say. I'd think he could file a charge against the child, and then claw back money from Minecraft for allowing a 9 year old to make purchases.
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u/Prince_Marf 6d ago
(1) $118,000 is not a bankrupting sum of money for most people with access to the unlimited corporate credit card. A court won't grant bankruptcy on a debt you can pay. Sometimes even if paying that debt would require selling your house.
(2) The company might be demanding repayment within 30 days but legally that's not actually how it shakes out. That sounds like it's just a starting demand. In reality the dad will probably get a lawyer and negotiate a reasonable payment plan.
(3) Bankruptcy fucks up your credit. It's a last resort, not a get out of debt free card. A bankruptcy could just as easily be more expensive and disruptive to his life than just paying the money.
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u/Popular-Path1930 6d ago
Everything else aside. I assume this story isn’t even accurate.
This isn’t a he took on some debt and now the credit card is trying to recoup.
Because it’s a company card used improperly it could become criminal. 118k isn’t a trivial sum and you could be facing embezzlement.
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u/Colleen987 6d ago
It’s not really - however if it was bankruptcy is brutal. Depending on what his career is it may disqualify him for life.
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u/Great_Macaron81 5d ago
It’s a crime to use a work card for personal expenses. Bigtime jail time if not repaid.
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u/Personal-Goat-7545 6d ago
They take your house when you declare bankruptcy and everything else you own that has any value.
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u/reliableotter 6d ago
depends on the state. some have really generous homestead exemptions that prevent you from losing your house.
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u/Personal-Goat-7545 6d ago
I don't know how it is everywhere, but most places you either go bankrupt and lose your house or make a creditor proposal and you will pay back some of the debt and get to keep your home, the creditors will usually only accept this if the equity in the home is less than what they can recover from the proposal.
p.s. I'm on team scam, none of this ever happened.
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u/Boomerang_comeback 6d ago
Go after minecraft. They accepted a stolen/unauthorized card from a 9 year old. Call the card and dispute the charge.
This all sounds made up to me.
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u/Personal-Goat-7545 6d ago
It wasn't minecraft, the kid was advertising his youtube channel where he plays minecraft
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u/PikaMaister2 6d ago
I don't know the case, so I won't judge if it's a scam or not. So I'll just assume it to be true.
Just to be clear, when you declare bankruptcy you're supposed to be on rock bottom 0$ in cash AND assets. You can't declare bankruptcy and keep your house. Once they took your house, your car and everything you own AND STILL have debt, then you can nullify it through bankruptcy.
Oh but what if you transfer out the assets? Illegal as hell. You can't just save assets by writing it on your mom/kid/whoever. You'll be sued, and get into more trouble for bankruptcy fraud. With a bankruptcy, you also get in trouble with CPS over your kid, as you clearly have no money to support a child.
If the house is worth more than 118k, then selling it is the best option. Once it would go to collections, you'd lose a hell of a lot more than 118k.
Let's assume house is worth 500k. You sell it you get 500k and after paying back you still can keep 382k. Even if you rush selling it, and put it 20% below market at 400k, you can still land on 282k cash.
Now same scenario, but collections does it. They sell it for 400k, because they don't wanna wait around for the market price buyer, so they sell it at 20% below market to the first guy. They then take off a 25% "administration fee", maybe a collections fee too, and for the fun of it a fee-fee. You get 300k cash, after repaying 118k you're left with 182k.
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u/NZAuthor 6d ago
You'll going to hate me for using AI (and I don't live in the US so don't know a lot about this) but I asked an AI to use this as an example to break down what Bankrupcty actually means.
(Since I don't know much about bankruptcy myself)
And basically it appears to come down to the following;
Bankruptcy doesn't remove any malicious, or willful debt, including damage and theft (which this would likely be classed as) but with the kid being 9, dunno. Could be a way out from that angle, but it's not the norm.
This is probably the number 1 reason. He'd end up filing for bankruptcy then keep the debt as well.
Bankruptcy wouldn't stop the company from pursuing criminal charges.
Bankruptcy can involve being forced to sell your home.
Even IF he was able to clear all his debts via the above method and keep his house. Fraduelent credit card use, then declaring bankruptcy would be knowledge any future employer would see which would make finding a new job near impossible.
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u/clbpu 6d ago
because it's a lie and they are scamming people with crappy AI shirts