Leader of Arizona School District Files for Chapter 7 Bankruptcy
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Leader of Arizona School District Files for Chapter 7 Bankruptcy

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May 24, 2013

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Just days before losing a home to foreclosure, Manuel Isquierdo, the leader of a school district in Tucson, Arizona, filed for Chapter 7 bankruptcy, according to a report from the Arizona Daily Star.

Sources say Isquierdo, who leads the second-largest school district in the city, was on the verge of losing his home in Oro Valley to foreclosure. The home is reportedly worth $1.1 million.

Bankruptcy is often able to prevent foreclosure, but Chapter 7 bankruptcy is sometimes less effective in stopping foreclosure than Chapter 13, and Isquierdo still faces a long road in his battle to save his house.

Sources say the family who sold the house to Isquierdo has asked the bankruptcy judge to waive the automatic stay, which would allow them to still foreclose on the home, but waivers of this important bankruptcy feature are relatively rare.

In his bankruptcy filing, Isquierdo, who makes an annual salary of $305,000, claims to have up to $1 million in both assets and liabilities, according to sources.

Isquierdo's bankruptcy petition placed both his assets and liabilities between $500,001 and $1 million, but did not provide any specific list of assets or liabilities. Nor did it include a statement of monthly income and a declaration of employer payments.

In a recent interview, the school leader said he had spoken with a bankruptcy attorney and determined that filing for bankruptcy was his "only way to negotiate the financial settlement and what we owe on the house."

Sources note that Isquierdo bought his house in 2011 directly from the previous owners, who extended a loan, but that the value of the home plummeted after he bought it.

And the potential foreclosure is just the first in a series of legal troubles for the school superintendent since he took office, according to sources.

Reports indicate that Isquierdo had his driver’s license suspended after failing to pay old fines, and also owes more than $150,000 in unpaid taxes. Sources also say the superintendent was criticized for making unauthorized purchases with his district credit card.

Despite the turmoil, though, Isquierdo remains confident that the bankruptcy will help him recover his financial health, and he promises local residents that the filing is "not impeding" his job.


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