Life will probably never be the same for gymnast Gabby Douglas and her mom, Natalie Hawkins. After winning gold medals in both the individual and team all-around competitions, Douglas has become the de facto face of American gymnastics. She’s also sure to bring in a number of lucrative endorsement deals.
However, before all that, Douglas’ mom filed for Chapter 13 bankruptcy, TMZ reports. Chapter 13 bankruptcy allows a debtor to set up a repayment plan to gradually eliminate his or her debt. With the earnings Douglas is bound to make after the Olympics, Hawkins won’t have any problems making her monthly bankruptcy payments.
In recent interviews, Hawkins has opened up about her financial history, showing that bankruptcy shouldn’t be a taboo subject. “It’s my story, it’s part of me,” Hawkins told reporters. “It shows that even though I didn’t like to have to do it, I’m glad there was something there for me to be able to protect my home.”
Hawkins had $163,706.10 in assets and $79,754.14 in debts at the time of her filing, according to documents filed in Virginia in January. Her creditors include Sprint, Capital One, T-Mobile, an orthodontist, and a student loan provider.
In order to work her way out of debt, Hawkins filed for Chapter 13, a less severe form of bankruptcy than the more popular Chapter 7. Hawkins told reporters that she filed for Chapter 13 in order to keep her home.
When a debtor’s home is facing foreclosure, she has a better chance of keeping the home by filing for Chapter 13, rather than Chapter 7 bankruptcy. In many cases, filing for Chapter 13 bankruptcy will permanently stop a foreclosure. The debtor will then pay back the missed payments in accordance with his or her repayment plan. On the other hand, in a Chapter 7 liquidation, the court will often grant the lender’s request to lift the automatic stay and continue foreclosure proceedings.
Natalie Hawkins’ began making $408 monthly payments back in February in accordance with her Chapter 13 repayment plan. With Gabby Douglas’ recent Olympic success, Hawkins should be able to pay off her debts in no time. It’s now clear that Gabby isn’t the only winner in her family. By facing her debt and sharing her story, Hawkins is a winner as well.
- Gymnast Gabby Douglas’ Mom Filed for Bankruptcy (CBS News)
- Chapter 13 vs. Chapter 7 Bankruptcy (FindLaw)
- Bankruptcy Basics (FindLaw)
- SAFE…from Creditors: Jose Canseco Files for Bankruptcy (FindLaw’s Phoenix Bankruptcy Law Blog)