A Chapter 13 bankruptcy allows for an individual or sole proprietor with unmanageable debts to create a repayment plan over the next three to five years to pay back creditors. Typically, this type of plan is attractive to many as it allows for a person to overcome their debt burden without having to forfeit assets to creditors.
Looking to the future, one state college football coach who recently filed for Chapter 13 bankruptcy hopes this will be the case for him. The coach listed between $10 million and $50 million in debts. In terms of assets he listed between $1 million and $10 million.
When looking at what happened, the coach blames the downturn in the real estate market. It was more than 10 years ago when he and a group of others got involved in some real estate investments. However, when the market started to crash, they all ended up losing money.
The coach was lucky though in the fact that the athletic director did not hold his financial situation against him when he took over as head coach. Rather, the director said it's understood that with the economy people are struggling. He signed a 10-month contract with the state school worth $850,000.
In general, this coach's debt situation is not unique as there have been plenty of residents in Florida and throughout the country who ended up taking a real hit when the real estate and housing market crashed. And, just like this coach realized, many have turned to Chapter 13 bankruptcy in order to create repayment plans and wipe their financial slate clean.
Source: The Associated Press, "Ex-Weber State coach John L. Smith files for bankruptcy," Chuck Bartels, Sept. 6, 2012