It seems many star athletes run into financial trouble after retirement and make the decision to file for bankruptcy. From Vince Young to Warren Sapp, athletes are looking for relief from overwhelming debt.
Sapp, a former professional football player, recently completed his Chapter 7 proceedings. This past April, Sapp filed personal bankruptcy, claiming he owed $6.7 million to creditors, but only had $6.45 million in assets. Although he has received a discharge, Sapp is still liable for hundreds of thousands of dollars in back taxes, child support and alimony.
After a party files a Chapter 7 petition with the bankruptcy court, he or she will need to provide documents detailing their income, debts, assets and any future financial obligations. The party will also need to provide the bankruptcy trustee with tax returns.
Chapter 7 for individuals requires that people with primarily consumer debts also provide a certificate of credit counseling and a copy of the repayment plan developed through the credit counseling process. They will also be required to provide evidence of payment from employers within 60 days of filing, a statement of monthly net income and any anticipated increases in income or expenses, as well as a record of any interest the party has in qualified federal or state education or tuition accounts.
Discharges are usually granted relatively early in the case, provided there are no objections from a party of interest. A Chapter 7 discharge releases the party from personal liability on most debts and prevents creditors from taking collection actions. Discharges are, however, subject to many exceptions, including back taxes, unpaid child support, alimony debts, most education loan debts and debts legal proceedings.
For many of those overwhelmed by debt, the prospect of a fresh financial start is reason enough o consider personal bankruptcy.
Source: Chicago Sun-Times, “Telander: It’s a crying shame star athletes are going bankrupt,” Rick Telander, Sept. 22, 2012
Sapp emerges from Chapter 7 proceedings, tackles his debt