Bankruptcy gives ex-Mississippi basketball coach relief

Becoming an entrepreneur or business mogul is alluring, especially the potential for a lavish lifestyle. These jobs and business ventures come with risks, however. And sometimes the debts that arise from risks, like substantial financial losses, can only be remedied by filing for Chapter 7 bankruptcy.

This is the reality for one bank entrepreneur, who started out as an assistant basketball coach for Mississippi State. In college, the now 71-year-old Banc Corp. founder was a track star for Mississippi State University. He continued his sports career after college, working as a basketball coach in both Alabama and Mississippi. He decided to leave coaching in the 1980s, however, and with a group of investors acquire the First National Bank of Ashland. From there, he acquired other banks and eventually established Banc Corp., which in 2004 had nearly $1.5 billion assets.

Although he appeared to be a man of great wealth, his financial affairs were not as they seemed. The Banc Corp. founder actually had to file for Chapter 7 bankruptcy in December 2012. He was facing overwhelming debt and financial challenges, listing nearly $18 million in liabilities and under $20,000 in assets on his bankruptcy petition. Last month, he finally got relief. Bankruptcy court records indicate that his petition was granted.

Not all of the listed debts were erased or forgiven, however, and over $2 million in tax and debts were not dismissed by the court.

This result is typical in these types of situations. The law is clear that not all debts can be discharged in bankruptcy. In fact, there is a long list of debts that do not fall within the Chapter 7 bankruptcy umbrella. They include taxes at all levels of government, student loans, debts arising from driving while under the influence incidents, government penalties and fines, court fees and those debts not included on the bankruptcy filing.

Although not all debts can be discharged in bankruptcy, bankruptcy is still a helpful tool for those struggling with debt. In the Banc Corp. founder's case, for instance, still dismissed nearly $16 million of debts. This is substantial and can offer him a fresh financial start.

Source: AL.com, "Birmingham banker Jimmy Taylor Sr. bankrupt, lists $18 million in liabilities, $15,500 in assets," Stan Diel, April 18, 2013

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