For many people, the only way to overcome mounting financial stress is to file for bankruptcy. Issues with debt can happen to anyone—we have reported in the past about well-paid entertainers, athletes and politicians who have had to file for bankruptcy to overcome tremendous financial obstacles.
Recently, the Columbus Dispatch reported that NHL player Jack Johnson, who has earned more than $18 million during his nine-year career, had to file for bankruptcy. The newspaper reported that the bankruptcy stems from risky decisions made by his financial handlers.
According to the Dispatch, Johnson took out a string of high interest loans that he defaulted on. Many of the loans reportedly originated with his parents, according to the newspaper. “I’d say I picked the wrong people who led me down the wrong path,” Johnson, a 27-year-old defenseman, told the Dispatch.
Johnson said that he is now working with a different team of financial advisors. The Dispatch reported that in one instance, Johnson’s mother borrowed “at least $15 million in her son’s name against his future earnings.”
Johnson filed for Chapter 11 bankruptcy and is reportedly attempting to workout repayment plans with his creditors.
Should I Talk to a Bankruptcy Attorney About My Loans?
As this case shows, bankruptcy and financial difficulties are common among high-income earners. Often, in these cases, bad investments lead to outstanding debts. It should be noted that in most individual circumstances, a person files for Chapter 7 or Chapter 13.
On rare occasions, as in Johnson’s case, a person can file for Chapter 11 bankruptcy, which is used primarily by businesses. This is usually true among people who have high incomes. In Maryland, a person can file for Chapter 11 bankruptcy if he or she has:
- $336,900 in unsecured debt, like credit cards, medical bills, vacation or home improvement loans and term deposits;
- $1,010,650 in secured debts, like homes, motor vehicles, boats and property
It should be noted that a Chapter 11 bankruptcy repayment plan typically lasts for longer than a Chapter 13 case.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: The U.S. bankruptcy court in Wilmington, Delaware led the country in business Chapter 11 filings in 2013.