The former Lieutenant Governor of Arkansas, Mark Darr and his wife, Kimberly, have filed for Chapter 13 bankruptcy. Chapter 13 is a bankruptcy for wage earners with regular income who want to pay part or all of their outstanding bills pursuant to a three to five-year payment plan. This type of bankruptcy is used mostly by consumers to try and keep their homes by getting their defaulted mortgages back up to date.
The former elected state official resigned in early 2014 after receiving criticism from state auditors regarding the misuse of campaign funds and incurring expenses not allowed by state law. He paid a fine in the amount that the auditors specified, and that problem does not appear to be directly involved in this case. However, it may be that the expenses and costs involved in that investigation may have at least impacted adversely his general financial strength and ability to dig out quickly enough to satisfy certain creditors.
In this filing, the couple seems to be foregoing quick and effective Chapter 7 relief in favor of the Chapter 13 route of designing a payment plan to pay creditors. It appears, at least on the surface based on news reports, that the couple would qualify for a Chapter 7 where they would eliminate their unsecured debt quickly and have no payment obligations. Their main debts appear to be $10,000 in credit card debt and $18,735 for a repossessed vehicle.
The couple also had their Arkansas residence repossessed in 2012 but that matter would seem to be consummated and not covered directly in this case. Their largest asset is a 2010 Cadillac Escalade, which they may be retaining in the bankruptcy by continuing to pay the monthly payments on their vehicle loan. The decision whether to file a Chapter 7 or a Chapter 13 is a completely case-specific inquiry, with each individual and married couple having a unique set of problems and financial roadblocks. Each person’s remedial need is best evaluated in consultation with an experienced bankruptcy attorney prior to making the decision on which path to take.
Source: arkansasonline.com, “Former Lt. Gov. Darr, wife file bankruptcy“, Brian Fanney, June 13, 2015