Most of my clients file for Chapter 7 bankruptcy owing under $100,000 in credit card debt. They worry about their Chapter 7 case from the moment they hire me until the moment of discharge. Would you be freaking out if you owed $136,558,093?
On July 13, 2011 a man by the name of Ausaf Umar Siddiqui filed a Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Northern District of California. His case consisted of primarily consumer debts, and he paid his lawyer $3,500 for filing the papers.
Siddiqui has no income, passed the means test without blinking, has monthly expenses of about $5,000 and is seeking a discharge of his debt.
That debt includes $ 22,391,279 in unsecured debts as well as $ 114,166,813 in mortgage obligations, though it’s not clear as to whether he intends to keep the properties in question.
According to news reports, Siddiqui is a former Fry’s Electronics executive who filed after being indicted on nine felony counts of wire fraud and money laundering totaling $6 million for a kickback embezzlement scheme against Fry’s in 2008. He has pleaded not guilty.
Siddiqui’s bankruptcy shows that he owes about $20 million to casinos in Vegas, Connecticut and Britain. He also owes money to at least five Fry’s vendors.
I don’t know much about the case beyond what I saw in the court filings (his lawyer uses BestCase for his bankruptcy filing program, for those of you who are in the business of filing bankruptcy cases for people) but a few things struck me as interesting.
First, his lawyer charged him $3,500 for a Chapter 7 bankruptcy that will ultimately involve issues far more complex than the typical case. I sure hope his attorney realizes he’s going to be working really hard for that money.
Second, and more important, is the fact that we’ve got someone who appears to be a man of power and (at one time) great wealth. He’s going to be sitting in a meeting of creditors alongside a family making just slightly above minimum wage.
There’s not too far to fall. One day you’re in an uptown apartment watching the skyline, the next you’re on the phone doing your pre-bankruptcy credit counseling. Don’t scorn those who are less fortunate because you may be one of them soon.
Third, for those of you faced with the need to file for bankruptcy please remember that it could happen to anyone. Forget the celebrity crowd who files for bankruptcy as a way of getting out of sour business deals while retaining a pretty good lifestyle.
Instead, realize that we all go through bad stuff in our lives – and we can all rise above it in the end.
Image courtesy of jeroen020.