Tennessee readers might be surprised to learn the identity of one consumer's Chapter 13 bankruptcy filing. The woman, who utilized the bankruptcy code's legal protections in order to avoid foreclosure and other enforcement collection actions against her, is the mother of Olympic gymnast Gabby Douglas. Douglas recently impressed fans with two gold medal performances at the 2012 Olympics in London. The 16-year-old is now reported to be in talks for endorsement deals worth millions of dollars. However, the financial outlook for her family was much different only a few months ago.
Separated from her husband and collecting a monthly income of about $2,500 in Social Security disability benefits and child support, Douglas' mother was not able to meet all of her monthly expenses. In addition to mortgage payments for her home, her expenses also included Douglas' training and provisions for her three other children. There was also a six-month period when she had little to no income, at which point her debt became practically unmanageable. According to bankruptcy filings, she listed $80,000 in debts, mostly in past due mortgage payments, and only $163,706 in total assets, including a townhouse and a 2007 Nissan Maxima.
What Tennessee readers should note about this story is how attitudes have changed about bankruptcy filings. Rather than being a source of embarrassment, Douglas' mother reports that she is grateful that Chapter 13 bankruptcy laws provided a legal means for reorganizing her debt in such a way that she was able to protect her home and pay what she owed.
Source: The Associated Press, "Gymnast Gabby Douglas' mom filed for bankruptcy," Aug. 9, 2012
- Our firm handles situations similar to the one discussed in this post. If you would like to learn more about our practice, please visit our Memphis Chapter 13 Bankruptcy page.