The Republican candidate in the 43rd Assembly District who has touted himself as a “business conservative” extinguished more than $49,000 in credit card debt after he and his wife emerged from Chapter 7 bankruptcy protection, court records show.
Candidate Greg Krikorian's wife, Christine, filed for bankruptcy in March 2011. He was added to the case as a co-debtor a month later, after the bankruptcy court noted that Christine had failed to list him in her filing as her husband and as a source of income.
In a welcome message on his campaign website,
Krikorian2012.com, Greg Krikorian touts his fiscal responsibility as a member of the Glendale Unified School District Board of Education, saying he can bring the same ethos to Sacramento.
“The state budget is in shambles,” the statement reads. “We spend far in excess of what we take in, while cutting funding for public education, public safety, and social programs for our most vulnerable citizens.”
This critique of state financial practices appears to belie what was happening in the Krikorian household, which owed about $47,000 to three creditors — Bank of America, Capital One and Citibank — which filed claims between 2000 and 2004, according to U.S. Bankruptcy Court records. The remaining debt was spread across several much smaller creditors.
In an interview Friday, Greg Krikorian — who is challenging Assemblyman Mike Gatto (D-Silver Lake) in the November election — said his wife incurred the debt and he was unaware of it until she broached the subject two or three years ago.
Krikorian said he and his wife maintained separate credit cards. He said he could not recall what the money was spent on.
“When you move it credit card to credit card, as she did, [the interest] just compounds,” he said.
Christine Krikorian did not respond to requests for comment.
The attorney who represented Christine Krikorian in the bankruptcy case, Jeffrey Kopczynski, said that while he could not recall specifics, it was most likely consumer debt that got out of hand due to the high interest rates imposed by credit card companies.
A debt of roughly $50,000, he added, was on the small side of credit defaults that he's seen, which typically run “six figures and up.”
Greg Krikorian said he urged his wife to do “what's best for her” after she met with Kopczynski to discuss her options.
All of the debt was discharged by a U.S. District bankruptcy court judge in August 2011.
Usually, people with a steady income must file for Chapter 13 bankruptcy and establish a plan to pay off the debt over time.
The Krikorians, who have five children, qualified for Chapter 7 protection under a calculation called a means test. Their $80,640 annual household income was below the test's threshold of about $100,000, the median income for a family of their size living in California.
The Krikorians' house and vehicles were exempted from being used to pay creditors.
According to Los Angeles County property records, they also owed more on their mortgage — $495,000 — than their home's assessed value of $340,938.
Greg Krikorian called the debt discharge “the last resort of trying to handle it.”
“Some voters can think all they want, but that's what the fact is,” he said.
At the end of the day, he added, the campaign isn't about his wife.
“Christine isn't running against Mike Gatto, Greg Krikorian is, and Greg Krikorian is committed to staying in this race to give voters a choice,” he said.
He highlighted his long service on the Glendale Unified school board and his good standing and involvement in the community as a small-businessman. He is founder of Krikorian Marketing Group and vice president of business development for Business Life and Senior Living magazines.
He also pointed out that his family debt problem was nothing compared to the more than $16-billion state budget gap that has widened during Gatto's time in Sacramento.
“This just strengthens my resolve to address the real issue, and that's our state's $16-billion debt,” Greg Krikorian said.
Darrell Connerton, president of the California Congress of Republicans, said “it's possible” that news of the bankruptcy could have changed his organization's endorsement of Greg Krikorian.
He added that while unexpected life events may force people's hands, filing for bankruptcy is a “bad business practice” that his group doesn't endorse.
Gary Aminoff, first vice chairman of the Republican Party of Los Angeles County, said he stands by his organization's endorsement.
“Anybody can get into financial trouble, particularly during these difficult times,” he said. “I don't see how that would necessarily affect his ability to represent his district.”