Gold-medalist's mother filed for bankruptcy to protect home

Gold-medalist's mother filed for bankruptcy to protect home

Olympic fever may have taken over Arizona residents the same way it took over the whole country, with viewers rushing to watch Gabby Douglas, nicknamed the "Flying Squirrel" for her remarkable performance in gymnastics. The first African-American woman to win an all-around gold medal in gymnastics, the 16-year-old won multiple medals.

Though she stands to earn millions of dollars in endorsements, the superstar's family may be no different from many Arizona families struggling with debt. According to newspaper reports, the international superstar's mother filed for Chapter 13 bankruptcyearly this year. Chapter 13 bankruptcy is an option for filers who are struggling with debt but either have certain assets they are unwilling to give up or do not qualify for Chapter 7 bankruptcy.

By filing for Chapter 13 bankruptcy, the filer can make court-supervised payments over a period of time. These payments depend on the filer's ability to pay and are approved by the court.

The gold medalist's mother claimed reorganizing her debt allowed her to pay back what she owed and continue to live her life.

According to reports, Douglas's mother went on long-term disability in 2009 and received a total monthly income of $2,500. During a period of six months, the mother of four had barely any income at all. Her major expenses included her mortgage, her daughter's training expenses and taking care of her other children.

Her main assets were her townhouse and 2007-model vehicle. She listed her total assets at $163,706 and her debts at approximately $80,000.

The gymnast's mother also claimed that she was happy she had an option available in order to keep her home and said that she did not regret her decision. Filing for bankruptcy, whether Chapter 7 or 13, may be a difficult decision to make but can allow the filer to take control of debt and get a fresh start in life. For many Arizona residents struggling with debt, bankruptcy may be the best option to protect their assets.

Source: Star Tribune, "Documents: mother of US Olympic gymnast Gabby Douglas filed for bankruptcy in January," August 6, 2012

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