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December 2016

When Bankruptcy Is the Perfect Play Call

As a big football fan, I’m excited to kick off this year’s NFL season. For the next few months, I know just what I’ll be doing on Sundays: tuning in to watch the country’s most talented athletes duke it out on the field. Everybody knows about the insane salaries NFL athletes make. According to Forbes, the average income for a pro football player in 2012 was $1.9 million, the kind of money most of us struggle to amass over an entire lifetime. But when they’re so lavishly compensated, why do so many professional football players go broke? In 2015, Sports Illustrated estimated that 80 percent of retired NFL players bottom out their bank accounts in the first three years out of the league. Some of the most famous bankruptcies in history can be attributed to the fiscal struggles of these revered athletes. A couple years back, I made a “bankruptcy tailgate party” infographic that outlined some of these stories. Take Lawrence Taylor, for example, linebacker for the New York Giants from ’81 to ’93 and one of the greatest players in the history of the game. Despite over $50 million in career earnings, he lost a fortune through hard partying, rampant drug use, and reckless spending. Problems with drugs and being caught filing a false tax return led to Taylor filing for bankruptcy in the late 90s. Taylor is far from alone in the NFL bankruptcy pantheon. More recently, Warren Sapp, defensive tackle for the Tampa Bay Buccaneers and then the Oakland Raiders until 2007, lost control of his expenses. His 2012 bankruptcy filing listed more than $6.7 million owed to creditors, as well as back child support and alimony. Before filing, he had over 240 pairs of sneakers, totaling nearly $6,500, and a $1,200 lion skin rug.

Not every case is as dramatic. Poor financial planning advice, doling out funds to family, divorce, poor preparation for a future outside of football — each of these factors lead to a staggering number of wealthy athletes declaring bankruptcy after the end of their playing career. So many people who come into my office do so with a hung head, nervous about the shame or embarrassment that they imagine filing bankruptcy will bring. They feel that they’ve failed. I’d encourage anybody who’s feeling down on their financial status to look at the many NFL athletes who have followed a similar path. These guys were at the top of their field, having made it through the peewee, high school, and college football gauntlet, each stage weeding out those who didn’t have what it took to make it to the top. Even after a life accustomed to the limelight and success at the highest level, each of these

men were able to make a practical decision about their life and decide they needed to get their finances together — and wipe the slate clean with bankruptcy. Bankruptcy shouldn’t be seen as a last-ditch failsafe full of shame and regret. In truth, it’s a valuable opportunity. I’ve seen dozens of clients file for bankruptcy, eliminate their debt, and reach a level of success they could never have dreamed of before.

When time’s running out and debt has made it fourth and long, bankruptcy is the Hail Mary that will turn a dire situation into a touchdown.

– Ron Drescher

Published by The Newsletter Pro • www.newsletterpro.com

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