A Minnesota legislator has filed for bankruptcy to discharge nearly a million dollars in debt. Part of the debt involves a federal loan that the couple has not made payments on for a number of years.
In 2009, Minnesota state senator Sean Nienow and his wife took out a $613,000 loan granted by the U.S. Small Business Administration. They used the money to found the National Camp Association, which would assist families with finding camp locations for their children. However, 18 months after receiving the money, the couple quit making the $7,589 monthly payments. In early 2014, a lawsuit brought by the U.S. Attorney against Nienow ended in a default judgment when Nienow did not appear in court.
In early June, Nienow filed for Chapter 7 bankruptcy, looking to discharge over $900,000 in personal debt. The largest balance, the 2009 SBA loan, is now listed at $747,937 in the filing. The court documents show that Nienow has $121,836 in assets, with the nonessential properties subject to liquidation as part of the proceedings. While many of the debts will most likely be discharged in the bankruptcy, the couple put up their home as a personal guarantee for the SBA loan. Therefore, the home might be turned over to creditors. Other assets that might be subject to liquidation include four firearms, two cars and his wedding ring.
When circumstances leave a person struggling with debt and unable to meet these financial obligations, filing a Chapter 7 bankruptcy may provide some relief. An attorney with experience in bankruptcy law could help assess the person's asset and debt situation and recommend a course of action that leads the client to a fresh financial start.
Source: Minnesota Public Radio, "State Sen. Nienow files for bankruptcy", Tom Scheck, July 11, 2014