The average professional athlete in the U.S. will make more in one season than most of us earn in our entire lives, however despite those staggering salaries, 78% of NFL players, 60% of NBA players and a very large percentage of MLB players (4x that of the average U.S. citizen) file bankruptcy within just years of retirement. These numbers were published in Sports Illustrated in an article on how and why a high percentage of pro athletes end up financially ruined.
Recently, former NFL star Warren Sapp filed for Chapter 7 bankruptcy (A copy can be seen here). When reviewing his Chapter 7 bankruptcy petition it is no great mystery on how he went bankrupt Sapp lists assets of nearly $6.5 million and liabilities of $6.7 million. Bankrupt.
In Sapp's 59-page Chapter 7 filing, there was no question that he's not a good money manager. He's become yet another example of highly paid athletes and entertainers who go bust after earning more money than most people will ever see in their lifetimes. Sapp, who now earns money as a sports broadcaster for the NFL Network, listed an average salary of nearly $116,000 a month. Clearly Warren Sapp makes more than the typical individual in whatever state he lives in. So how is he in a chapter 7? The answer lies in the nature of his debt. Most of Sapp's liabilities can be classified as "non-consumer" debt--that is, related to business expenses. A big part of the retired pro's financial problems are traceable to a string of failed businesses; this put him in a better position than someone who merely ran up a collection of maxed-out credit cards. Persons with non-consumer debt can be exempt from the means test.
What's interesting about Sapp's filing is he wouldn't be broke if not for his business debt. He has considerable retirement money that can't be touched by creditors and is safe in the chapter 7 bankruptcy.
Every bankruptcy case is unique, and you need an experienced and qualified attorney who will file your bankruptcy correctly. The Monmouth County bankruptcy attorneys at Riviere Cresci & Singer LLC, have experience in the field call today for a free consultation.