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Hockey player seeks benefits of Chapter 7 bankruptcy

Massachusetts residents who follow NHL hockey might be interested to know that a professional hockey player who claims to have been bilked out of millions of dollars by his own parents is attempting to convert his Chapter 11 bankruptcy into a Chapter 7 bankruptcy. His creditors are not pleased with his request and have legally objected.

The hockey player originally filed for bankruptcy protection under Chapter 11, which is a route that is commonly used by wealthy individuals as well as businesses. Under Chapter 11, the player would have to have his finances closely monitored as he restructured his debts so that he could re-pay most of them. Apparently, the player does not feel that this approach is feasible any longer and has now asked the bankruptcy court to allow him to file under Chapter 7.

Chapter 7 in this case would mean that the hockey player could turn over a relatively small amount of assets in exchange for a government-backed write off of millions in debt. The upshot is that the hockey player is expecting $15 million in future contract payments and would be able to keep that money while still walking away from his debts.

Naturally, the hockey player's creditors do not like this idea and have asked the bankruptcy court to deny the player's request. They have even gone so far as to allege that the player's motion is an abuse of the bankruptcy system and would allow him to get away with bad choices and still be able to maintain what many would consider a lavish lifestyle.

These accusations, of course, will have to be sorted out in court. If anything, though, this story illustrates that even those with great financial means can get involved in sticky financial situations that are not always entirely their fault.

Source: Deadspin, "Jack Johnson Is Fighting For His Contract In Bankruptcy Court," Samer Kalaf, Sept. 10, 2015

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