The NFL football season kicked off last night and the second weekend of college ball is coming right up. In Texas especially, football is a game that has rightly been called America’s passion. From the famous Friday Night Lights to college and pro stadiums, the passion is palpable.
It’s easy to forget, however, amid all hoopla, that many people who work in the football industry struggle with financial problems. Just as with all other Americans, football players and coaches may need to consider a consumer bankruptcy filing to regain their financial footing.
In one recent case, for example, a former interim mjor-college coach filed for Chapter 7 bankruptcy.
This week, a bankruptcy judge signed off on a settlement that will allow the coach to discharge millions of dollars worth of debt. The large debts were the result of several real estate deals that sent badly wrong. The coach will have to give up some of the real estate in exchange for the bankruptcy settlement.
The negotiations that led to the settlement were complicated by the question of how much income the coach may have earned after filing for bankruptcy. In general, income earned after a bankruptcy filing is not treated as part of the bankruptcy estate.
In this case, however, the coach’s creditors contended that he had improperly structured his contract with the university. They claimed the coach had an inordinate amount of his pay deferred until after the bankruptcy filing.
The bankruptcy trustee did consider that contention carefully. But the trustee concluded that deferring the contract money was not done fraudulently.
In short, this case is a reminder that, for all the glory on the field, everyone involved in football is only human. And sometimes humans need debt relief and a fresh financial start through bankruptcy.
Source: USA Today, “Ex-Arkansas coach discharged of debt in bankruptcy deal,” Brent Schrotenboer, September 5, 2013