While not every person who encounters financial worries will have to file for Chapter 7 bankruptcy, it does happen to some individuals. This includes high-profile athletics personnel, including one former Michigan State football leader and coach. His Chapter 7 began last year, and has finally been settled according to recent reports.
The coach, John L. Smith, sought Chapter 7 in 2012 to handle his $40.7 million in debts. Smith's particularly-high debt amounts were due to poor real estate business decisions that were allegedly made in the Louisville, Kentucky, area. The Chapter 7 settlement arrangement allows him to avoid a drawn-out trial against his creditors (business partners among whom many were also personal friends.)
The settlement means that although Smith will not have to pay back all his debts, he will have to pay $665,000 in cash and real estate. This figure represents about 16 percent of what he would have owed, and the decision by a judge who specializes in federal bankruptcy proceedings is being seen as an excellent alternative for Smith. Today, he is working as a head football coach in Colorado after being let go by the Arkansas Razorbacks, a move that was reputedly related to his Chapter 7 filings.
Though not every Chapter 7 dealing has millions of dollars on the line, the people involved are no less determined to better their financial situations than someone like former Michigan State coach Smith. The truth is that everyone can make poor fiscal decisions, or find themselves in unexpected straits that cause them to contemplate bankruptcy as a viable means of getting their lives back on track. The first step is getting solid advice to investigate the facts and help explore any options.
Source: Detroit Free Press, Ex-Michigan State coach John L. Smith discharged of debt in bankruptcy deal, Brent Schrotenboer, Sept. 4, 2013