Submitted by Rachel R on Tue, 03/26/2013 - 9:30pm
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If you’re deep in debt and are considering either a Chapter 7 or Chapter 13, you may feel like you’ve done something wrong – you may even feel embarrassed. But truly, a financial blip can happen to anyone. I’ve written before about celebrities and athletes that have had to file bankruptcy because their finances have spun out of control for one reason or another.
But now, news has emerged that an unlikely person has opted to take care of their debt dilemma by seeking out a bankruptcy lawyer. Durham NC District Court Judge William A Marsh III and his wife Marsha filed Chapter 13 bankruptcy late last year. So what set this judge on the road of seeking debt relief through bankruptcy protection?
In their bankruptcy (Chapter 13) filing, the Marshes list assets of nearly $450,000 but this is far outweighed by their debts which were listed at $577,000. Of this, $71,250 is owed for federal, state and county taxes. Other debts include student loans, medical bills and homeowner’s association dues.
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In a follow-up filing in March, their income is listed at $116,000 or $9,666 per month. Their Chapter 13 plan shows they’ve agreed to pay $4,600 per month to their Trustee to be distributed to their creditors. The Marshes are also sacrificing an office condo in Durham and a vacation spot in Hilton Head.
Marsh has been a District Court judge for the past six years and was re-elected in November for a second four year term that will carry him through 2016 on the bench in Durham. So how did it happen that the Marshes got so sullied with debt that they felt bankruptcy was their only option? We don’t know – but I imagine it happened the way it happens to anyone.
An increase in an adjustable rate mortgage, a personal illness or illness of a loved one or even a few bad decisions can set anyone’s finances into a spiral. For many people it’s a job issue – perhaps you quit your job because you couldn’t deal with your boss or take the office politics anymore – but then found you couldn’t get another job. The pluses of a Chapter 13 are that you are still servicing your debt – still paying off your creditors – but are under a repayment plan that will give you a longer time to get your affairs sorted.
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Payment plans in Chapter 13 can last up to five years. As a rule of thumb, the minimum number of months for a payment plan is 36, unless your debts are paid in full prior to then. But, like a Chapter 7 filing, a portion of your debts may be forgiven. If your payment plan is approved by the court in accordance with bankruptcy laws, once you make all of your scheduled payments, any remaining debt will be wiped out.
As in the case of Judge Marsh, a Chapter 13 bankruptcy is most appropriate when you have disposable income available to make monthly payments, but not quite enough to meet the payment amounts required under your financial contracts. Your mortgage and car loan payments will not be lessened, but other debts (such as credit card or medical debt) can be restructured to make your monthly payments more affordable.
If you are in debt and feel like you’ll never be head above water, a Chapter 13 bankruptcy may be the lifeline you need. And know that if even a respected judge can get into a bind where they need debt help, it can happen to anyone – even to you – and it’s nothing to be ashamed of. If you need help with your debt and want to explore a bankruptcy filing, consult a reputable North Carolina bankruptcy attorney!
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