College football coach files for Chapter 7 bankruptcy

The down economy is affecting all members of the community -- from college football coaches to people in Mississippi. In fact, a university football coach in a neighboring state recently filed for Chapter 7 bankruptcy to seek debt relief for some real estate investments. Chapter 7 bankruptcy is a legal tool that many people can use to tackle their financial challenges. However, not everyone can take advantage of this form of bankruptcy. Thus, it is important for individuals struggling with debt to work with an expert to determine whether they can file for Chapter 7 bankruptcy or whether other financial remedies are available.

Before leading his team through this year's college football season, the University of Arkansas' coach decided to grapple with his distracting financial challenges. His looming financial challenges arose from some of his real estate investments in Kentucky. The coach admits that he made property investments between 1998 and 2002. When the real estate market weakened, however, he lost significant money on these investments.

Eventually, the football coach realized that Chapter 7 bankruptcy was his only answer. As a result, in early September he filed for Chapter 7 bankruptcy. In his preliminary bankruptcy filing, the coach revealed that he has between $1 million and $10 million in assets and between $10 million and $50 million in debts. The coach will now work with the bankruptcy court to seek debt relief.

Chapter 7 bankruptcy is a unique legal tool that allows individuals, like the Arkansas coach as well as people in Mississippi, to use liquidation to combat their financial challenges. Not everyone can file for Chapter 7 bankruptcy, however. There are several situations in which a debtor is not eligible. For example, the individual's income may be too high. The individual may also have filed for bankruptcy in the recent past. Alternatively, the individual may be able to pay off some of the debt.

When a debtor does not qualify for Chapter 7 bankruptcy, a bankruptcy judge will typically suggest alternative financial remedies. For example, the judge may convert the case to a Chapter 13 bankruptcy. Accordingly, an individual should not become discouraged if he does not qualify for Chapter 7 bankruptcy. The legal system provides numerous remedies that a debtor can use to improve financial challenges. This coach's situation simply demonstrates that Chapter 7 bankruptcy is one available remedy.

Source: Yahoo! Sports, "Arkansas' Smith files Chapter 7 bankruptcy," Chuck Bartels, Sept. 6 2012

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