Indebted Federal Judge in California Files for Personal Bankruptcy
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Indebted Federal Judge in California Files for Personal Bankruptcy

May 24, 2012


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Otis Wright, a U.S. District Judge in California, is filing for Chapter 7 bankruptcy, despite making more than $170,000 annually, according to a report in the San Jose Mercury News.

Sources say that Wright has been serving as a judge for five years but now faces the prospect of bankruptcy because he is unable to pay his mounting debts, which include $30,000 in credit card debt and $17,000 owed to a few clothing stores.

In his bankruptcy filing, which was filed jointly with his wife, Wright said the couple’s assets were worth roughly $833,000, but that their liabilities totaled almost $900,000, leaving them in a very precarious financial position.

And it’s not uncommon for people with Wright’s salary to file for bankruptcy. In fact, hundreds of thousands of people with relatively high salaries file for bankruptcy every year.

Interestingly, the couple’s total income took a steep dive since 2009, when they collectively earned roughly $270,000. Last year, their collective income dropped by almost $100,000.

In addition, Wright and other district judges earn less than similar federal employees, many of whom routinely earn more than $200,000 a year, according to information offered on the United States Courts website.

According to that website, the annual salary of most federal employees has increased more than 90 percent over the past two decades, but the pay for federal judges has only increased by 36 percent over the same period of time.

This pay disparity may explain why more than 120 federal judges have decided to resign or retire since 1990. Wright, apparently, blames his low pay on his inability to meet his debt payments, although his attorney told sources that he did "everything he could to pay his creditors," including dipping into his retirement funds.

Despite his efforts, though, Wright still found himself "underwater." Recently, a bankruptcy trustee announced that the Wrights’ home, which is located in pricey suburb of Los Angeles, will be for sale.

The initial price tag on the home is $1.2 million. Wright used to work as a sheriff’s deputy in Los Angeles County and he also served as a Marine. He was nominated to his post by George W. Bush after serving as a state judge from 2005 to 2007.

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