Image source: Greensboro-NC.gov
Back in April, Greensboro Mayor Robbie Perkins filed for bankruptcy citing pressures from the real estate collapse that affected his firm plus financial pressures resulting from his divorce. A few months later, Perkins appealed to a judge to lower his support obligations - $11,000 to his ex-wife plus more than $30,000 for private school tuition. In court, the sitting mayor revealed he had just a couple of thousand dollars in the bank and no assets other than furniture and clothes. Despite his political position in Greensboro, this sounds much like most of the bankruptcy clients we see in our office.
Support and Alimony in Bankruptcy
While most people don’t have to pay $11,000 per month in support obligations, many find they struggle to pay these amounts, but the bankruptcy court won’t lower support payments as part of the bankruptcy petition. What they can do, though, is take them into account when developing the payment plan for the petitioner. The only way to lower support obligations is to go back to family court with proof of depressed income and make a request through that court. What bankruptcy can do is free up some income to devote to it.
Image source: MemphisDivorce.com
Unsecured Debts in Bankruptcy
Most unsecured debts can be relieved in bankruptcy - even student loans if you put some work into it - no matter how much you owe. Perkins, for instance, owes $8.5 million in unsecured debts – most stemming from business deals that went bad when the market crashed in 2008. And while to most of us this seems like an extraordinary amount of debt, a large part of this is business rather than personal debt. If you’re feeling like you’re in over your head with $40,000-$50,000 in debt, Perkins’ millions he can’t pay should give you some comfort as to how flexible of a solution bankruptcy can be.
Bankruptcy and Privacy
Many of our clients worry what will happen if their bankruptcy becomes common knowledge. For Mayor Perkins, unfortunately, his high public profile means that his bankruptcy didn’t stand a chance of staying on the down low. But for most people, despite that all bankruptcies are a matter of public record, it’s not easy to access this information so if you want to keep it to yourself, it’s very likely that you can. Foreclosures are different because they are advertised, so bear that in mind if you’re debating using a bankruptcy to prevent losing your home.
Image source: Marketplace.org
Your Job and Bankruptcy
The other concern you may have is that, if it is discovered that you filed bankruptcy, you could lose your job. The law says you cannot be fired for filing bankruptcy but in the Mayor’s case, there have been concerns raised about whether he’s fit to run the city of Greensboro when his personal finances are in disorder. What we see with our clients – and what could be true in Perkins’ case as well - is that if a major life event (divorce, business upheaval, job loss, etc) rather than gross mismanagement causes your bankruptcy, there is not necessarily a correlation between personal finances and your job.
If you live in North Carolina and are overwhelmed with debt, contact the law offices of John T Orcutt for a free consultation today!