WILLMAR - Steve Peppin, who is running for Willmar mayor, doesn't shy away from his past, including his failures as a small business owner.
"I am trying, I am working hard. I know I have the integrity to make things right," Peppin said.
On Oct. 10, Peppin's latest Chapter 7 bankruptcy case was closed, ending with a significant amount of his debt being discharged by the U.S. Bankruptcy Court - meaning he is no longer legally required to pay those debts.
In the case, which was opened on May 31, Peppin reported $634,848 in liabilities and only $63,848 in assets. He said most of that debt was business-related.
"In business there are times you get overwhelmed and you make mistakes," Peppin said.
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Peppin previously operated two bars, one in Willmar and one in Atwater, but both were ultimately unsuccessful and closed.
He said the bankruptcy - his second - would not impact the two businesses he currently operates in Willmar: Pep's Barbershop or Relentless Ink, the tattoo parlor.
"I found myself in a similar situation, but worse," Peppin said. "Both of the bars broke my back."
Minnesota bankruptcy law says that individuals can file for Chapter 7 once every eight years. Peppin declared bankruptcy the second time only a few months after the eight-year limit had passed.
Peppin's previously filed for Chapter 7 bankruptcy in February 2010. It was filed Feb. 25, 2010, and was closed June 17, 2010. The filing documents show Peppin reported $78,900 in assets and $199,114 in liabilities. Those debts were reported as personal in nature.
He is the only current Willmar city candidate who has filed for bankruptcy.
Peppin said filing for bankruptcy is a way for him to get control back as well as make it possible to pay all his creditors back. He said in the first bankruptcy case that he paid everyone back, and he has every intention of doing it again.
"They are all getting some sort of payment," Peppin said.
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In addition to the bankruptcy creditors, the Kandiyohi County and city of Willmar Economic Development Commission earlier this year wrote off $7,766 as uncollectible from a loan they guaranteed for Peppin's barbershop in 2010. The original loan amount was $7,980. Peppin has said he plans to still pay that money back as well.
Chapter 7 bankruptcy, if approved, can wipe out most of a debtor's debt. The debt is separated into two categories, secured and unsecured debt. Secured debt is attached to an asset, like a vehicle or property. Unsecured debt is usually such things as credit cards, student loans or child support payments, things that are not attached to an actual item. While some debt, like most taxes and schools loans, are ineligible to be discharged, debt from credit cards, utilities and other unsecured bills can be eliminated through Chapter 7 bankruptcy.
The bankruptcies were not easy decisions for Peppin and it has been tough for his family. Even though he no longer legally owes those creditors after the debt was discharged in court, Peppin is adamant he will make everything right. The bankruptcy filing will make that easier to do.
"I want to pay them back on my terms," Peppin said. "I'm living broke to make things right."
