Federal judge files for Chapter 7 bankruptcy
In news reports and even on our Atlanta bankruptcy blog, it often seems that the only people who file for bankruptcy or let their home go into foreclosure are people who are in relative poverty or are dealing with the loss of a job, medical expenses or some other costly circumstance. However, that is not the case. The economy has had a negative impact on people with a wide range of financial means, from the entry-level office worker who is laid off during downsizing to a federal judge who can no longer keep up with his mounting debt.
The latter situation is actually taking place right now in California, where federal district judge Otis Wright II has filed for Chapter 7 bankruptcy along with his wife. According to the court filing, the couple was forced to file for bankruptcy after the judge’s wife’s business began to suffer during the economic recession and its aftermath.
In the bankruptcy document, the Wrights stated that their income fell by $100,000 from 2010 to 2011 as a result of Judge Wright’s wife, who is a self-employed social worker, experiencing business trouble. The couple listed assets of $833,426 and liabilities of nearly $900,000, made up primarily of their mortgage, car loan and credit card bills of more than $70,000. The bankruptcy trustee handling their case will reportedly put their home on the market in an effort to generate funds for creditors.
In an effort to pay off debt and avoid bankruptcy, Judge Wright reportedly drained his retirement accounts prior to making the filing. Hopefully his case works out in his favor so he and his wife are able to retire comfortably at some point in the future.
Source: Wall Street Journal, “Federal Judge, ‘Like So Many Others,’ Files for Bankruptcy,” Joe Palazzolo, April 25, 2012