PCH, Damon Dash, & Florida Foreclosures: Weathering the Next Financial Storm

Weekly Bankruptcy Analysis: Structural Flaws and Consumer Fallout

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Updated on September 30, 2025.

Welcome to the Weekly Bankruptcy Analysis, where I move beyond the headlines to examine the legal precedents, economic forces, and policy implications driving the week’s most significant bankruptcy stories to tie together my experience as a bankruptcy law attorney and scholar to how these filings and trends affect the law and the American consumer.

This week, a major corporate Chapter 11 filing, structural financial pressures in a key state, and the legal realities of a high-profile Chapter 7 case.

Publishers Clearing House (PCH): The Limits of Chapter 11 for Consumer Trust

The Chapter 11 filing by Publishers Clearing House (PCH) is a clear demonstration of how a changing media landscape can undermine a traditional business model. It’s why I tell my business law students that if their business is not constantly changing and adapting, it could lead to their financial demise. I even explain this in a short YouTube video where I compare the economy to my bird pond, meaning if the water if flowing, I have a healthy, balanced ecosystem. Just like the economy. But if the water is stagnant, it is deadly. The same applies to the economy. It cannot be stagnant!

The Chapter 11 filing by Publishers Clearing House (PCH) is a clear demonstration of how a changing media landscape can undermine a traditional business model. In my business law and consumer bankruptcy courses, I often stress that stagnation is a precursor to insolvency. PCH’s failure to adequately adapt its revenue stream from print media dependence to a sustainable digital model illustrates this point.

From a bankruptcy law perspective, the central issue is the treatment of prize obligations and whether future payouts to prior winners will be secured during the Chapter 11 process.

Crucially, the PCH bankruptcy has an immediate consumer protection dimension. The public news of PCH’s financial difficulties is already being leveraged by criminals. I have personally encountered clients victimized by sophisticated PCH lottery scams in recent months. Unfortunately, one individual I spoke with lost approximately $50,000 after receiving a fraudulent call.

With the rise of AI, these scams have become easier to execute and more convincing, specifically targeting elderly or less tech-savvy individuals whose personal data may be more easily accessible online. The community needs to be made aware: PCH will never contact you directly demanding money, fees, paying taxes on the winnings in advance, or gift cards to claim a prize. Here’s a YouTube short discussing the PCH lotto scam.

Florida’s Financial Pressures and the Law of Unintended Consequences

My home state of Florida is an example of how the unintended consequences of government policy reactions can affect the real estate markets.

Policy-Induced Real Estate Crises

The collapse of the Champlain Towers South condominium in Surfside, Florida, on June 24, 2021, tragically resulted in the deaths of 98 people. The Florida legislature reacted quickly to the Surfside tragedy by passing legislation on inspection requirements. While the goal was public safety, the result is an affordability crisis for condominium owners.

Massive special assessments by homeowner’s associations have increased the foreclosure risk for these older buildings. This is a classic example of the law of unintended consequences, where a well-meaning intent becomes overshadowed by the consequences.

Several factors now further stretch Florida households’ budgets into consumer bankruptcy, which are already experiencing a rise in.

The Home Insurance Market: The big insurance companies are pulling out of Florida, and the cost of the coverage that’s left is skyrocketing. Unaffordable home insurance acts like a hidden tax on homeowners. It shrinks your disposable income and means that if just one disaster hits, a hurricane, a bad storm, or a major unexpected repair, it’s far more likely to push you into filing for Chapter 13 or Chapter 7 bankruptcy.

Having to deal with my fair share of hurricanes, and recently because of Hurricanes Milton and Helene, consider reading these posts regarding handling insurance claims and what is known as Acts of God, which explains the issues I had to deal with.

• Protect Your Rights: Act of God in Natural Disasters
• FEMA vs SBA: Know Your Disaster Aid Options

Credit Card Debt: Florida’s ranking as a top state for total outstanding credit card debt ($97.4B) suggests that households are depending on credit cards to manage the rising costs of living. Chapter 7 bankruptcy is the most common type of bankruptcy filed, and it’s usually because of unsecured debt like credit cards. Nationally, the credit card debt total is $1.32 trillion.

Damon Dash: Unsecured Debt and the Non-Dischargeability of Domestic Support

Hip-hop mogul Damon Dash recently filed for Chapter 7 bankruptcy. While he may not be the common debtor since he listed $25 million in debt, what is common is the issue of  Domestic Support Obligations (DSOs).

In bankruptcy, support obligations such as spousal support or child support are non-dischargeable debts. To learn more about DSOs and how they are handled in bankruptcy cases, consider reading this prior blog post.

My Analysis: These issues, PCH’s restructuring, Florida’s policy-driven foreclosures, and Dash’s Chapter 7, underscore today’s rapidly changing financial environment. Whether it’s technology, climate risk, or consumer affordability, the real lesson for businesses and consumers is to read past the headlines and analyze their situations to be prepared to weather a financial storm.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.