Tennessee readers who find themselves in debt may feel a little better about their financial situation when they hear about the massive debt accrued by a popular Arkansas college football coach. Recently released documents show that the coach has debts totaling in excess of $25 million, while his assets are only around $1.2 million. The records show that the man owes the majority of this debt – around $20 million – to a single entity in Louisville.
Given this load of debt, it’s hardly surprising that the coach has filed for Chapter 7 bankruptcy. The man began his personal bankruptcy proceedings earlier this month, stating he lost out on several real estate investments he made between 1998 and 2002. Like so many other investors, he saw his fortunes fall sharply after the real estate market crashed.
The papers state that the coach’s largest assets are a pair of retirement accounts, each amounting to around $600,000. The coach claims that both of these accounts should be exempt from the Chapter 7 liquidation process; in practice, this will probably be the case. Retirement accounts are rarely liquidated in the Chapter 7 bankruptcy process.
Instead, the coach will probably find those hefty accounts intact as he moves through though the Chapter 7 procedure, a process that will protect him from creditors while he discharges his debt.
Filing for personal bankruptcy is not just for people with seven-figure debts. It can also be a powerful tool for average consumers who simply cannot rise above the cycle of debt. Those considering Chapter 7 as a solution to their debt problems may wish to speak to a bankruptcy attorney for more information about their rights and responsibilities under the law. Bankruptcy can be a complex and challenging process, but debtors may find a brighter future at the end of it.
Source: wsmv.com, “Arkansas coach Smith bankruptcy shows $26.7M debt,” Sept. 20, 2012