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State delegate reportedly declared bankruptcy before election

The general public may think that politicians and corporate leaders generally have their finances in perfect order; after all, those people are required to manage public money. Recent bankruptcy cases show that politicians are no different from the average American citizen who is struggling with various types of debt. Even if representatives are excellent money managers at work, they may find themselves in financial crises that require personal bankruptcy action. Luckily, the American bankruptcy system allows people from all walks of life to seek relief through debt forgiveness.

A former state delegate from Maryland, Tiffany Alston, reportedly filed bankruptcy shortly before she was accused of attempting to use campaign funds to pay for wedding expenses. The woman's bankruptcy filing had not been revealed until recently, though the woman came under fire for financial misdeeds much earlier. The bankruptcy filing reportedly was finalized in May 2010, just before Alston was elected. She began her term in January 2011.

Experts say the woman had claimed nearly $200,000 in debts, including $26,000 that was owed to her former law partner. She reportedly owed about $132,000 in student loans, along with $20,000 remaining on her car loan.

Since the majority of Alston's debt consists of student loans, it is unlikely that she was able to have her debt liquidated through Chapter 7 bankruptcy. Student loans are extremely difficult to discharge during bankruptcy proceedings. As a result, she may have chosen to pursue a Chapter 13 restructuring plan, which would allow her to expunge some debt while developing a payment plan to satisfy her creditors. Alston has never spoken publicly about her bankruptcy proceedings.

Source: The Washington Post, "Tiffany Alston declared bankruptcy before running for office," Paul Schwartzman, Dec. 30, 2012.

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