Trustee aims to stop hiding of assets in personal bankruptcy

While wealth sometimes makes life easier for Mississippi residents, at times it can complicate situations. This is true in personal bankruptcy cases, as well, as greater assets often correlate with greater debt, complicating a bankruptcy proceeding. The case of an alleged Ponzi scheme operator shows what can result when a person who lived an extravagant lifestyle files bankruptcy.

A family who has been allegedly running a Ponzi scheme for the past 12 twelve years has filed for bankruptcy. The family apparently used the Ponzi scheme as its only source of income to fund its other businesses, including day care centers and a billing company, among others. Their total debt is estimated at $12 million, with all but $2 million owed to victims of their Ponzi scheme. The bankruptcy trustee has recently requested a restraining order to prevent the family from hiding assets during the bankruptcy proceeding.

In the majority of personal bankruptcy cases, the people involved are not involved in the kinds of activities alleged against the family in this story. Quite frequently, the need for bankruptcy arises from unexpected life changes and financial challenges. For individuals in need of debt relief, Chapter 7 and Chapter 13 are two bankruptcy options. While there are income limits for filing Chapter 7, many families are able to take advantage of its protections. Chapter 7 helps to eliminate unsecured debt, stop creditor harassment, and allow retention of some property. Chapter 13 is well-suited for people Mississippi residents who have regular income but are just unable to meet all their debt obligations. It works by creating a reasonable debt repayment plan over a period of years.

Bankruptcy is a big step, but it is often a step in the right direction. With the help of a bankruptcy attorney, people struggling with overwhelming debt can understand the options and make a smart financial decision that can help them get back on their feet.

Source: Times Free Press, "Trustee goes after Brown family assets," Ellis Smith, Jan. 11, 2013

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