I am a College Football Fan. No, really I’m just a Pac-12 College Football Fan, and I check in on the other conferences when Bowl Season comes around or when ASU is playing out of conference. I don’t care enough about other conferences to know the names of Coaches as a result.
But…if any major college football Coach files for bankruptcy, it would catch my eye.
John Smith, Arkansas Football Coach has done just that. He filed a Chapter 7 Bankruptcy on Sept 6 of this year. If the article I found about his bankruptcy is accurate (See it at the Washington Post) I think my suspicion that major College Football Coaches live in a different world than the rest of us has been confirmed.
Coach Smith has 26 unsecured creditors and more than 25 million in debt. His largest Creditor is Terra Springs LLC of Louisville. He paid his Chapter 7 Bankruptcy Attorney $20,000.00 up front. He has a ten-month contract with Arkansas for $850,000.00 of which he has earned $115,000.00.
Since his bankruptcy filing, Arkansas has lost to Louisiana-Monroe in what I think many would call a really big upset and was completely shutout by Alabama 52-0, this after being ranked #8 in the Nation at the beginning of the season.
Some of you that are familiar with bankruptcy may be asking how a guy that makes close to a million dollars per year is able to file a chapter 7 and dislodge himself from the obligation to pay at least some of his debt.
What you may not know is that in many Bankruptcy Courts, if a bankruptcy filer has business or other non consumer debt that is greater than all other debt, the filer qualifies to file a chapter 7 bankruptcy even if they could afford to pay some if it back in a chapter 13 case.
That person doesn’t have to subject himself to the bankruptcy means test.
I assume this is the case in Arkansas and if so, Coach Smith will likely keep his salary or whatever portion of it is exempt in Arkansas and get rid of most of his obligations.
Another item to take note of:
Lots of people use bankruptcy to deal with those times when life takes a serious twist or a turn: actors, politicians, coaches, doctors, big companies, roofing contractors and homemakers.
For many that file, it really can’t be avoided and in the end, if handled correctly, it can be a tremendous relief and a fresh start.