A struggling economy has left many Americans struggling with financial challenges caused by unemployment, business ownership, medical issues or bad investments. Some people reach the point where Chapter 13 or Chapter 7 bankruptcy becomes the best means of achieving debt relief. John L. Smith struggled with that decision the summer of 2012 in the spotlight of the media attention that is part of being the head football coach at the University of Arkansas.

 

Smith traces his current financial challenges to real estate investments he made about 11 years ago. He knew when he accepted his current coaching position earlier this year that the collapse of the real estate market had left him deeply in debt. The Chapter 7 petition his bankruptcy attorney filed earlier this month listed debts of up to $50 million and assets between $1 million and $10 million. This was a preliminary petition and will be followed by additional filings with more specific information about his assets and debts.

 

People who are struggling with debt frequently try to resolve their financial challenges through avenues other than bankruptcy. Some individuals attempt mortgage modification when home loan debt is an issue, or they try to negotiate with creditors. This may work for some people, but for others who need to stop wage garnishment or stop creditor harassment, filing for Chapter 7 bankruptcy may be the only solution.

 

Smith said that concern for the effect his financial struggles might have on his job performance and the university forced him to make the decision to file for personal bankruptcy. Smith accepts his decision to file Chapter 7 as a fresh financial start that he is not embarrassed to talk about in the media.

 

Source: Associated Press, “Arkansas’ Smith files Chapter 7 bankruptcy,” Chuck Bartels, Sept. 6, 2012