Former president of the California Correctional Peace Officers Association, Don Novey, and his wife filed for Chapter 13 bankruptcy recently. A recent hearing gave creditors an opportunity to probe the couple's finances. The attorney for Novey's former employer disputed much of the content of the bankruptcy filing. A second hearing has been scheduled for July 19th, and it is likely that an objection will be filed on behalf of the CCPOA.

The couple told the court that they had $2,700 in their bank accounts. They also maintained that an Arizona condo they bought in 2006 is a rental property; even though have yet to formally rent the property out.

Rental properties that generate an income are not always seized as assets in bankruptcy cases, but second residences, such as vacation homes are. A repayment plan has been filed with the bankruptcy court to restructure their debt obligations on their home in Rocklin and on the condo in Arizona.

Novey and his wife have credit card and other unsecured debts totaling $181,000 and also owe the CCPOA a $20,000 settlement after they filed suit against Novey in 2009. The couple owes $55,000 in federal taxes and another $27,000 in California state taxes. Their total liabilities were listed as $600,000, almost double the value of the assets included in the original filing.

Novey amended the bankruptcy filing in federal court before the first hearing, adding some additional assets. One of the more interesting items listed in the original court documents was a pair of boxing gloves signed by Mohammed Ali. Novey increased the estimated value of the gloves from $250 to $1,200. A timeshare property in Hawaii and another in Cancun were also included, listed at an estimated value of $2,200. He also added supplemental evidence to support the claim that the family jewelry collection is worth $5,000.

For people struggling under the burden of unmanageable debt, bankruptcy offers a way to relieve the stress that they are likely experiencing. Court hearings are an inevitable part of most bankruptcy cases, and creditors are permitted to dispute the amount they are owed and the estimated value of assets that individuals have in their name. In cases like this, the assistance of a qualified and understanding legal advocate may help people to navigate the bankruptcy procedure.

Source: The Sacramento Bee, "What's next for Don Novey's bankruptcy?," Jon Ortiz, 29 June 2011