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College football coach files Chapter 7 bankruptcy

Anybody can experience financial hardships, including celebrities and athletes. Generally, it is high-profile young athletes which are known to recklessly spend their money and end up in financial trouble. However, sometimes it is the older and wiser athletic figures who can end up with overwhelming debt due to bad financial decisions. It just goes to show that knowledge of sports does not translate into financial knowledge in Texas and elsewhere. This was the case with college football coach John L. Smith, who recently filed for Chapter 7 bankruptcy.

Smith filed his petition for bankruptcy as a result of losses due to bad real estate investments. His petition lists $25.7 million worth of liabilities, while reporting only $1.2 million of assets. However, the coach's wealth is not useful in his ability to repay his debt, since much of the money is located in retirement funds. The coach claimed he only had $300 in cash on hand and $500 in his bank account.

His real property portfolio is also not too impressive, according to his bankruptcy documents. From his estimates the coach owns approximately $2,000 worth of real estate, which is derived from 25 percent interest in the real estate holdings of his deceased parents. Many watchers did not find the coach's filing shocking, since he had previously admitted to his financial problems publicly, including his losses from real estate investments.

The coach had a variety of claims against him listed in the petition, the largest being one for $20 million. Smith chose Chapter 7 bankruptcy, which allows petitioners in Texas and elsewhere to possibly discharge their unsecured debts, which could include credit cards or other types of loans not attached to a piece of physical property. However, there are no reports verifying which claims are unsecured debts. In some cases a petitioner may require legal assistance to figure out which debts can be discharged through the bankruptcy process.

Source: GantDaily.com, "Arkansas coach Smith files for bankruptcy," Sept. 20, 2012

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