While the Olympics are wrapped up and the events are over, the eyes of Essex County sports fans are still on the athletes who competed and walked away victorious. This attention, as it does for any celebrity, is not always the most positive, though. For Gabby Douglas, a gold-winning gymnast, this has brought the eyes of the world to her family and her mother’s Chapter 13 bankruptcy.
Douglas’ mother filed for bankruptcy earlier this year when facing the possibility of losing her home. The mother of four had garnered a debt of nearly $80,000 comprising of miscellaneous debts from cell phone payments do orthodontist bills. Additionally, she was only bringing in around $30,000 per year mostly from social security medical disability payments and child support from the husband she is in the process of divorcing.
With total assets of approximately $160,000, and most of that coming from the family home and car, a Chapter 13 bankruptcy filing was a wise decision for the Douglas family. This filing allowed the mother to maintain her home and car while temporarily stopping creditor collection so she could form a viable repayment plan. Now, she pays $408 per month toward her debts and will continue to do so for 5 years until her debt is absolved.
Chapter 13 bankruptcy is one that can work well for Essex County households without a lot of extra assets that can be liquidated to pay off debts. When a family has children, too, the loss of a home or car can seriously impact the way that family can function from day to day. Being able to preserve these assets can be a great relief to families like Douglas’, and make a stressful financial situation easier to manage.
Source: allmediany.com, “Olympic Gymnast Gabby Douglas’s Mom Files for Bankruptcy,” Molly C. Braswell, Aug 8, 2012