When faced with these situations, it is extremely important for you to know that you have rights and that you are not at the mercy of unscrupulous debt collectors.
In fact, the federal Fair Debt Collection Practices Act (FDCPA) expressly prohibits creditor harassment, meaning debt collection agencies cannot use deceptive, abusive or unfair practices.
However, many experts have pointed out that while the FDCPA is certainly effective, it hasn't undergone any type of large-scale reform since its enactment back in 1978. Consequently, it may not be keeping up with some of the illicit practices now relied upon by debt collection agencies.
]]> Interestingly, Massachusetts Attorney General Martha Coakley recognized this fact and has helped introduce much-needed revisions to her state's regulations concerning debt collection agencies. (The original regulations closely follow the FDCPA.)Under the newly revised Massachusetts regulations, debt collection agencies may no longer do the following:
"Given the industry's recent advances in technology, we concentrated on how we could bring our regulations up to date and streamline them to be consistent with other state and federal agencies," said Coakley. "These amendments ensure that the playing field is level for both creditors and consumers so that all parties are better protected."
It remains to be seen whether the rest of the 49 states and the federal government will follow suit concerning the reform of rules/regulations governing debt collection agencies.
Don't be intimidated by threats of legal action or repossession. Contact an experienced legal professional to learn more about your debt relief options.
This post is for informational purposes only and is not to be construed as legal advice.
Stay tuned for more from our San Antonio bankruptcy blog ...
Source:
The Huffington Post, "Bad news for most debt collectors and good news for consumers," Bill Bartmann, May 8, 2012
]]>For those unfamiliar with Chapter 11 bankruptcy, it typically entails a debtor proposing a plan of reorganization outlining how it will keep its business alive and pay off creditors over the course of time.
Here, Hostess indicated in court documents that it plans to keep its business operations afloat with $75 million debtor-in-possession financing from a New York investment firm, and listed assets of $1 billion and debts/liabilities exceeding $1 billion.
Just last month, the company went before the U.S. bankruptcy court in New York, asking it to terminate existing labor agreements, which in turn would allow the company to alter how it funds purportedly expensive pension obligations.
However, the two unions that represent well over 75 percent of the company's 18,500-member workforce -- the International Brotherhood of Teamsters and the Bakery, Confectionary, Tobacco Workers -- have already indicated that if the labor agreements are thrown out, there will be a strike.
]]> In response, Hostess management has indicated that if a strike does occur, the company will lose its bankruptcy financing as its backers pull out and that a shutdown will occur.In fact, just last Wednesday, the company sent notification to its 18,500 member workforce informing them that their jobs are at risk of being terminated unless the company can find a new buyer or emerge from Chapter 11 in relatively short order.
The notification was mandated by the federal Worker Adjustment and Retraining Notification (WARN) Act, which states that employers must notify workers of any looming layoffs.
"The notices were sent to alert employees that a sale or wind down of the company is possible in the future," said Erik Halvorsen, a Hostess spokesperson. "Our goal is still to emerge from bankruptcy as a growing company. There are no immediate actions being taken to sell of wind down the company."
It is worth noting that Hostess operates one distribution center with 17 employees here in San Antonio.
Stay tuned for future developments from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Sources:
The San Antonio Business Journal, "Hostess Brands warns of companywide layoffs," James Aldridge, May 9, 2012
The Los Angeles Times, "Hostess files for Chapter 11" Jan. 12, 2012
]]>Unfortunately, this was precisely what happened to Diana M. of Wheeling, West Virginia.
Back in 2010, she received a phone call from a debt collector with the company Reliant Financial Associates indicating that she had an outstanding debt and that failure to pay the debt would jeopardize her home.
As it turns out, this proved to be a classic case of mistaken debtor identity as RFA -- one of many companies which purchases old debts from original debtors in the hopes of one day collecting -- had Diana M. (who has no debt) confused with someone else.
]]> Understandably upset, Diana M. sent a certified cease and desist letter to RFA, demanding that they stop all communication attempts.However, shortly after the company received the letter, Diana M. began getting many strange hang-up calls from a number that registered as the local sheriff's department on her caller ID. However, the sheriff's office informed her that no one had contacted her when she called to investigate.
As if this wasn't shocking enough, she eventually received a highly offensive and frightening call from the same number threatening sexual violence. However, even though she was shaken by the caller's threats, Diana M. had the brilliant idea to record the conversation.
After careful research, she discovered that many debt collectors use a practice called spoofing, whereby they use another number to hide their real identity on caller ID and, more significantly, that other people had complained about an RFA debt collector who made vulgar and criminal threats toward women.
Diana M. eventually filed a lawsuit against RFA and was awarded $10,860,000 last year -- the largest award ever against a debt collection agency. The judge who ordered the award called the company's actions "malicious."
Interestingly, Diana M. has not been able to collect any money from RFA so far. However, she said the lawsuit was never about the money but rather about making things right.
"I hope that it sends a message to other debt collectors out there that you have to follow the law," she said. "Because if you don't, there are going to be people out there that are going to stand up against you."
Stay tuned for updates from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about preventing repossession and fighting creditor harassment.
This post is for informational purposes only and is not to be construed as legal advice.
Source:
ABC News, "W. Va. Woman fights to collect $10 million from debt collectors," Elisabeth Leamy, April 25, 2012
]]>ASA filed for Chapter 7 bankruptcy back on April 24, claiming no assets and approximately $31,550 in debts. In fact, the adoption agency's 359-page bankruptcy petition lists almost 950 couples -- many of whom were in the process of adopting -- as unsecured creditors.
For those unfamiliar with Chapter 7 bankruptcy proceedings, trustees manage the gathering and liquidation of non-exempt assets, and the distribution of proceeds from the sale of these non-exempt assets among unsecured creditors.
]]> Now, law enforcement officials are working to see if ASA -- which opened back in 1985 and has placed over 5,000 children here in Texas and across the globe -- offered services to potential clients that it never intended to deliver.Specifically, the Attorney General's Office is investigating whether ASA violated the Texas Deceptive Trade Practices-Consumer Protection Act by accepting money for services they knew they wouldn't be able to provide.
The San Antonio Police Department is also in the process of conducting a similar investigation.
"A detective told me that the date of my check put it within the time frame [of] when the owners knew they were going down," said one parent who gave ASA a check for $34,300 in February to go toward a second adoption only to see his money disappear. "Why did they take my money? ... We're talking about babies here."
ASA officially shuttered its operations back on April 9, much to the shock of thousands of parents across the globe. A creditors meeting is scheduled for May 24.
Stay tuned for updates on this intriguing story from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The San Antonio Express-News, "Closed adoption agency under investigation," Melissa Fletcher Stoeltje and Patrick Danner, April 30, 2012
]]>Interestingly, the U.S. Bankruptcy Court for the Western District of Texas in San Antonio recently released a report detailing the number of bankruptcy filings in South-Central Texas last month.
The report reveals that the number of Texans filing for bankruptcy actually increased by 4 percent from March to April. Specifically, the number of people seeking debt relief via Chapter 13 rose significantly.
]]> The number of Chapter 7 bankruptcy cases filed during April 2012 reached 152. This constitutes a slight dip from March 2012, when there were 157 Chapter 7 bankruptcy filings, and April 2011, when there were 173 Chapter 7 bankruptcy filings.In Chapter 7 bankruptcy proceedings, trustees manage the gathering and liquidation of your non-exempt assets (often excluding your home, car and household furnishings), and the distribution of proceeds from the sale of these non-exempt assets among your unsecured creditors.
The number of Chapter 13 bankruptcy cases filed during April 2012 reached 226. This constitutes a nearly 12 percent increase from March 2012, when there were 202 Chapter 13 bankruptcy filings.
In Chapter 13 bankruptcy proceedings, debtors must file a plan for paying off debts according to classification -- secured, priority unsecured or general unsecured -- and make monthly payments (over a three to five year period) to a trustee, who then distributes the payments to creditors.
It is worth noting that through the first quarter of 2012, there have been 1,386 bankruptcy filings. This is an 8.8 percent drop from the same time last year.
Stay tuned for more from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The San Antonio Express-News, "Regional bankruptcy filings edge up," Patrick Danner, May 1, 2012
]]>As has been the case for the past two years, the figures present a good news-bad news scenario.
According to the report, foreclosures -- including bank seizures, default notices and scheduled auctions -- increased in 114 of 212 metro areas from the final quarter of 2011 through the first quarter of 2012. Breaking the numbers down further, the report found that foreclosure activity increased in 26 of the nation's 50 largest metro areas during the same timeframe.
Overall, however, the total number of foreclosures in metro areas are at a lower level than the same time last year. In fact, 64 percent of the 212 metro areas monitored by RealtyTrac saw a year-over-year decline in foreclosures during the first quarter. This includes such major cities as Las Vegas, Seattle, Salt Lake City and Austin.
]]> "First quarter metro foreclosure trends were a mixed bag," Brandon Moore, Chief Executive Officer of RealtyTrac. "While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter -- an early sign that long-dormant foreclosures are coming out of hibernation in many local markets."Indeed, many experts believe that a surplus of foreclosed homes will soon be making its way onto the real estate market.
In 2011, many mortgage lenders were forced to re-file thousands of foreclosures in state court systems. This step was necessitated after accusations surfaced that mortgage lenders wrongly foreclosed upon hundreds of thousands of homes using flawed procedures and/or partial data.
In addition, mortgage lenders were generally more careful about initiating new foreclosures in 2011, taking time to make sure that all paperwork was properly filled out.
Both of these actions served to create a sizeable foreclosure freeze, that may be on the verge of freeing up.
Now, experts are also predicting that the recent $26 billion settlement between five of the largest U.S. banks (Wells Fargo, Ally Financial, Bank of America, Citigroup, and JPMorgan Chase) and the attorneys general of more than 40 states will push even more foreclosures forward in 2012.
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal advice.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Source:
CBS News, "Foreclosures rise in many U.S. cities," IIyce Glink, April 26, 2012
]]>Now it appears as if these discussions are finally becoming a reality, as an attorney representing the opera company indicated just last week that the company will be filing for Chapter 7 bankruptcy within the next month.
Evidently, the only reason for the delay is that the paperwork to notify musicians, art vendors and season ticket holders -- all potential claimants -- is still being prepared. Once this is completed, the filing will proceed.
San Antonio residents may recall that the opera company was plagued with a litany of problems over the past few months, including the departure of founder and artistic director Mark Richter in November and the subsequent departure of his interim successor, Terrance Frazor, less than two months later when the company was unable to make payroll.
]]> Furthermore, the opera company was forced to close its office in January, and cancel the productions of "Don Giovanni" and "Barber of Seville.""Every single person is sad that San Antonio opera has to file for bankruptcy," said the attorney. "These people are all volunteers. They did this because it was something they loved. The arts are difficult. It is hard to make money in the arts."
Interestingly enough, another factor that may have expedited bankruptcy for the opera company was a federal lawsuit filed by the American Federation of Musicians, Local 23, seeking back pay from a cancelled January 2010 production.
Here, 46 musicians argued that they were only given short notice of the cancellation and had previously turned down other paying gigs to take part in the production.
The union subsequently filed a grievance and the two sides were able to reach a settlement, whereby each musician received $1,000 (plus $80 to each musician's pension account) to be paid in eight installments. However, the lawsuit alleges that the payments suddenly stopped last year, with $34,500 remaining to be paid out to the 46 musicians.
The opera company's attorney indicated that this lawsuit will more than likely be converted to a bankruptcy claim once the filing is complete.
Even though it appears that the San Antonio Opera will soon be closing its doors, another group, the Opera Theater San Antonio, is slowly moving forward with plans to begin staging operatic events.
Stay tuned for more from our San Antonio bankruptcy blog ...
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The San Antonio Express-News, "S.A. Opera to file for bankruptcy within 20 days," David Hendricks, April 17, 2012
]]>The study, performed by the D.C.-based advocacy group First Focus, examined foreclosure and home mortgage loan information, as well as U.S. Census Data from 2004 to 2008. Here, they found that approximately one in ten children in the U.S. have been or will be affected by foreclosure.
"Children are often the invisible victims of the foreclosure crisis," said Julia Isaacs, one of the study's primary authors.
The study made the following rather startling findings concerning children and foreclosure:
According to Bruce Lesley, president of First Focus, children who are forced from their home frequently suffer health issues, stunted development and declining academic performance.
It is worth pointing out that the study only covers data from 2004-2008, meaning that the number of children hurt by foreclosure may actually be much larger. Furthermore, the foreclosure freeze may finally begin to thaw this year, leaving more families without a home.
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal advice.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Source:
The Chicago Sun-Times, "Study: Foreclosures take toll on kids," Julie Schmit, April 19, 2012
]]>For those unfamiliar with Chapter 11 bankruptcy, it typically entails a debtor proposing a plan of reorganization outlining how it will keep its business alive and pay off creditors over the course of time.
Here, Hostess indicated in court documents that it plans to keep its business operations afloat with $75 million debtor-in-possession financing from a New York investment firm, and listed assets of $1 billion and debts/liabilities exceeding $1 billion.
In recent developments, the company went before the U.S. bankruptcy court in White Plains, New York last Tuesday, asking it to do away with existing labor agreements, which in turn would allow the company to alter how it funds purportedly expensive pension obligations.
However, the two unions that represent well over 75 percent of the company's 18,500-member workforce -- the International Brotherhood of Teamsters and the Bakery, Confectionary, Tobacco Workers -- have already indicated that if the labor agreements are thrown out, there will be a strike.
]]> Interestingly, both sides are fully aware of the fact that a potential strike would more than likely bring about the demise of Hostess.In fact, Hostess management has stated that if a strike does occur, the company will lose its bankruptcy financing as its backers pull out and that a shutdown will occur.
"We would no longer have cash to keep operating," said a Hostess management letter addressed to employees. "All Hostess Brands operations would shut down and liquidation would begin. The 18,500 jobs, plus the health insurance that comes with them, would be lost for good."
Teamsters' officials, however, have countered that Hostess management is actually pushing for the confrontation and subsequent liquidation at the behest of its secured creditors who want their money returned. Furthermore, they counter that Hostess management needs to make more sacrifices/improve its offer, and that the union has made more than generous offers to help keep the company afloat.
"We put an offer on the table with $150 million in concessions," said the Teamsters' secretary-treasurer Ken Hall. "There is not a chance our members would accept [Hostess' offer]. They won't work for nothing."
It is worth noting that while the Bakery, Confectionary, Tobacco Workers has remained relatively silent on the issue, it appears they will not cross picket lines in the event of a strike.
Stay tuned for future developments from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Sources:
CNN Money, "Strike threat at Hostess could kill off Twinkies," Chris Isidore, April 17, 2012
The Los Angeles Times, "Hostess files for Chapter 11" Jan. 12, 2012
]]>Interestingly, a report published in the latest edition of the International Journal of Business and Social Science shows that college students here in the U.S. may not be following these rules. In fact, it shows that they not only have large levels of credit card debt, but that they also don't know otherwise basic information about their credit card.
Here, researchers from five U.S. universities -- including three right here in Texas -- surveyed 725 students across the country in 2009 on basic financial literacy as it pertains to credit cards.
]]> Some of the more notable findings of the survey were:Perhaps one of the most stunning findings of the study, however, was that all of the students surveyed were business majors.
"These results should serve as a wakeup call for both our college students and our college outreach efforts into the community to train people about the costs of credit," said the study. "It is clear the status quo of financial literacy is a failure."
While the survey is certainly concerning, it's important to remember that it may actually help raise awareness among college students and cause them to keep a closer watch on their finances.
Stay tuned for updates from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about managing credit card debt/bad credit and fighting creditor harassment.
This post is for informational purposes only, and is not to be construed as legal advice.
Source:
Fox Business, "Survey: Students fail the credit card test," Martin Merzer, April 16, 2012
]]>Today's post -- the second in a series -- will take a brief look at what financial experts consider to be the most crucial mistakes that credit card users can make.
]]> Balance transfersFor many people, it makes good financial sense to transfer their balance to a credit card with a lower interest rate as it will save them money in the long run. However, experts advise that this may not be the wisest approach if you are undertaking the balance transfer simply because you cannot afford to pay it.
"You're not actually getting yourself anywhere when you do that," said Jessica Cecere, president of a Florida-based nonprofit for credit counseling. "You're robbing Peter to pay Paul. That's not only one of the seven deadly sins, but also a warning sign you're in financial trouble if you're using one card to pay another."
Opening credit cards
When you are out shopping, you will more than likely be bombarded with seemingly good offers on store credit cards. However, experts advise against opening too many lines of credit in too short of a timeframe as it can actually harm your credit score.
In addition, they advise that store credit cards can have very high interest rates, typically don't offer much in the way of flexibility or valuable incentives, and can also harm your credit score if you open one and then immediately close it.
Closing credit cards
While you may want to rid yourself of temptation by simply paying off and closing all of your credit cards, experts advise that this may not be the best course of action.
Specifically, experts advise that such a move can actually harm your credit history and leave you with no available credit. Instead of closing all of your credit cards, they recommend simply paying them down and perhaps putting them to the side for the time being.
Stay tuned for updates from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about managing credit card debt/bad credit and fighting creditor harassment.
This post is for informational purposes only, and is not to be construed as legal of financial advice.
Source:
Fox Business, "Seven worst credit card habits," Karen Haywood Queen, April 11, 2012
]]>Today's post -- the first in a series -- will take a brief look at what financial experts consider to be the most crucial mistakes that credit card users can make.
]]> Late paymentsEven though life can suddenly become hectic and balancing your checkbook can get put on the back burner, experts advise credit card holders not to forget to make their payments on time.
Here, the failure to make timely payments can result in additional late fees and interest, and also cause your interest rate to skyrocket.
Furthermore, your credit score can be affected.
"The timeliness of your credit card payment is 35% of your credit score," said Manisha Thakor, a financial author. "One small thing -- being late -- mucks up a third of your credit score."
Making only the minimum monthly payments
While it may seem enticing to pay off only the minimum monthly balance, experts advise consumers to avoid this temptation if possible. The reason? By making only the minimum monthly payment, you will end up actually paying far more over the long run.
Interestingly, experts indicate that if you make only minimum monthly payments on a credit card with an interest rate that is in the high teens or higher, you will likely end up paying double the amount for the item(s) over the life of the debt.
Agreeing to be a co-signer
Here, experts advise the consumer to proceed with caution when it comes to co-signing on a credit card, as a person's inability to make payments will become your problem and potentially haunt you for years to come.
Interestingly, they advise parents or other parties looking to help someone establish credit to consider secured credit cards instead of co-signing.
A secured credit card functions exactly the same as regular credit card. The only difference is that the line of credit equals the amount deposited into a corresponding account.
To illustrate, if you deposit $300 into a savings account associated with the secured credit card, the line of credit is $300.
More importantly, a secured credit card enables the user to establish a strong credit history.
To be continued ...
Stay tuned for updates from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about managing credit card debt/bad credit and fighting creditor harassment.
This post is for informational purposes only, and is not to be construed as legal of financial advice.
Source:
Fox Business, "Seven worst credit card habits," Karen Haywood Queen, April 11, 2012
]]>According to the report, the number of foreclosure filings in the first quarter of 2012 -- including bank seizures, default notices and scheduled auctions -- decreased by 2 percent from the previous three months, falling to their lowest level in over four years. This means that approximately one out of every 230 U.S. homes -- or 572,928 -- received some type of foreclosure filing.
While this decrease may seem encouraging on its surface, many experts believe it may be nothing more than red herring, meaning that a surplus of foreclosed homes will soon be making its way onto the real estate market.
]]> In 2011, many mortgage lenders were forced to re-file thousands of foreclosures in state court systems. This step was necessitated after accusations surfaced that mortgage lenders wrongly foreclosed upon hundreds of thousands of homes using flawed procedures and/or partial data.In addition, mortgage lenders were generally more careful about initiating new foreclosures in 2011, taking time to make sure that all paperwork was properly filled out.
Both of these actions served to create a sizeable foreclosure freeze, that may be on the verge of freeing up.
Now, experts are also predicting that the recent $26 billion settlement between five of the largest U.S. banks (Wells Fargo, Ally Financial, Bank of America, Citigroup, and JPMorgan Chase) and the attorneys general of more than 40 states will push even more foreclosures forward in 2012.
"The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated," Brandon Moore, Chief Executive Officer of RealtyTrac. "The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen."
Breaking the information down further, the RealtyTrac report ranked the five states with the highest foreclosure rates in the nation for the first quarter of 2012:
Stay tuned for more from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about bankruptcy and foreclosure.
This post is for informational purposes only and is not to be construed as legal advice.
(Please note: The firm handles only bankruptcy matters and is not involved in any pending class action lawsuits against banks/mortgage lenders. We take pride in reporting matters that are important to our community.)
Source:
Bloomberg Businessweek, "Foreclosure filings decline in U.S. to lowest since 2007," Dan Levy, April 12, 2012
]]>As it turns out, however, it's not just young people who are currently grappling with massive student loan debt.
Recently released research by the Federal Reserve Bank of New York indicates that American seniors -- meaning those 60 years of age and older -- have roughly $36 billion in student loan debt and that upwards of ten percent of these seniors are currently behind on loan payments.
This means that the Social Security checks relied upon by many seniors are perhaps being garnished and that debt collectors may be hounding people over student loans that are several decades old.
]]> "A student loan can be a debt that's kind of like a ball and chain that you can drag to the grave," said William Brewer, the president of the National Association of Consumer Bankruptcy Attorneys. "You can unhook it when they lay you in the coffin."Why then are so many seniors encumbered by student loan debt?
According to experts, seniors are still trying to pay down student loans 1) taken out many years ago while still young, 2) taken out later in life to subsidize a career change or 3) taken out by their children or grandchildren that they co-signed for.
"I shake my head every day at the thought that I'm working for nothing," said a 58-year-old woman who went back to school in the late 1980s and is still fighting to pay down a $21,000 student loan that has since ballooned to $54,000. "It's really a black hole because there's no end in sight."
Interestingly, Senator Richard Durbin (D-Illinois) recently introduced legislation that would allow private student loan debt to be discharged in bankruptcy. While debtors would still be responsible for federal student loans, such a measure could potentially provide much-needed relief for many.
Stay tuned for updates from our San Antonio bankruptcy blog ...
Contact an experienced legal professional to learn more about managing student loan debt/bad credit and fighting repossession.
This post is for informational purposes only and is not to be construed as legal advice.
Source:
The Washington Post, "Senior citizens continue to bear burden of student loans," Ylan Mui, April 1, 2012
]]>According to reports, Warren Sapp recently filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court in Fort Lauderdale, listing $6.45 million in assets and over $6.7 million in debts, including several hundreds of thousands of dollars in child support and alimony, and almost $1 million owed to the Internal Revenue Service.
In Chapter 7 bankruptcy, a bankruptcy trustee will gather up some -- but not all -- of a person's assets and liquidate (sell) them. The earnings from the sale of these assets will then be used to pay unsecured debts, meaning those that do not use assets as security (collateral) for the loan. Any remaining debt will be then be discharged. However, it's important to note that neither alimony nor child support can be discharged in bankruptcy.
]]> Some of Sapp's more notable assets include 240 pairs of Nike Air Jordan shoes worth roughly $6,500, a watch valued at $2,250 and a lion skin rug worth $1,200. Both his Super Bowl ring -- won in 2002 as a member of the Tampa Bay Buccaneers -- and his 1991 college national championship ring -- won in 1991 as a member of the Miami Hurricanes -- were reported as lost in the bankruptcy filing.Interestingly, the bankruptcy filing also indicated that Sapp's monthly income is roughly $115,881, including money from appearances, a book deal and as a football analyst for the NFL Network.
However, a recent story in the Boston Globe cites two anonymous sources who stated that the NFL Network won't be renewing Sapp's analyst contract, which expires in August.
The story indicates that the decision not to renew likely has something to do with controversial comments recently made by Sapp concerning the aforementioned bounty system allegedly established by the New Orleans Saints. Here, Sapp referred to former Saints tight end Jeremy Shockey on air as a "snitch," blaming him for the NFL investigation.
Most football fans remember Sapp from his dominant 12-year career with the Tampa Bay Buccaneers and the Oakland Raiders. During this time, he was selected for seven Pro Bowls and won the 1999 award for NFL Defensive Player of the Year.
Stay tuned for future developments from our San Antonio bankruptcy blog ...
Regardless of your financial situation, contact an experienced legal professional to learn more about your rights and your options under Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This post is for informational purposes only and is not to be construed as legal advice.
Sources:
USA Today, "Warren Sapp files for bankruptcy in Florida" April 7, 2012
The Fox Sports, "Source: NFL Network to drop bankrupt Sapp" April 8, 2012
]]>