Even with substantial and often excessive salaries, college football coaches, like many other citizens, are struggling with debt. Chapter 7 bankruptcy may be an option. The Alabama Roll Tide football team demolished the Arkansas team 52-0. This loss is not the only struggle for the Arkansas coach who has filed for Chapter 7 bankruptcy for a fresh financial start.
The coach is currently trying wipe away the overwhelming 40.7 million dollars in debt through Chapter 7 bankruptcy while still holding onto $1.2 million in retirement accounts and some personal property. The bankruptcy filing listed 26 unsecured creditors which include real estate investment debt and credit card debt. Once the Chapter 7 bankruptcy is complete, assuming there are no complications, the coach will be released from all of his debts.
Chapter 7 bankruptcy allows a person who is struggling with debt to get rid of or extinguish most of their debt in order to start with a fresh slate. There are also drawbacks of Chapter 7 bankruptcy. These drawbacks may include loss of property, including the home in which the creditor lives and a lowered credit score. Certain tests must be met in order to qualify for this chapter of bankruptcy. Certain types of debt cannot be extinguished through Chapter 7 bankruptcy. These types may include government funded student loans, certain forms of tax debt, child support and others.
Bankruptcy can be a necessary and extremely helpful option for those who are financially hurting. It can provide a clean slate and fresh start. However, there can also be sacrifices along with a bankruptcy depending upon the individual's situation.
Source: Shreveport Times, "Arkansas Coach John L. Smith's Debts hit $40M," Brent Schrotenboer, Oct. 3, 2012