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National Hockey League player files for personal bankruptcy

Professional sports players often make millions from the get-go in their careers. However, this does not mean that they are immune from financial problems.

Massachusetts residents may be interested to hear that National Hockey League player Jack Johnson has filed for personal bankruptcy. Johnson, who plays as a defenseman for the Columbus Blue Jackets, owes approximatelyyy $10 million in liabilities, but has only $50,000 in assets. His financial problems persist despite having earned $19 million throughout his career as a player in the NHL. In addition, his current annual earnings of $5 million are currently subject to a garnishment in order to pay toward some of his debts.

In Johnson's case, his parents allegedly played a role in his financial downfall. They reportedly used his earnings to purchase vehicles, renovate their property and travel. While NHL players attend seminars that aim to help them make wise financial decisions, this does not prevent some of them from being victimized.

As this example shows, just about anyone can suffer from financial challenges. Poor money-management decisions may play a role in a debtor's problems, but, in many cases, factors that are outside his or her control, such as the loss of a job or a serious illness, can play a major role in a debtor's financial problems. When this happens, filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy may be a good decision. Both types of bankruptcy offer a means for debtors to change their financial situation for the better.

In a Chapter 7 bankruptcy, the bankruptcy trustee liquidates a debtor's assets to pay his or her creditors and discharges or extinguishes all remaining debts. In a Chapter 13 bankruptcy, the debtor creates a repayment plan with the court to address his or her debts in a more manageable way. These are only two debt relief options that debtors may want to consider. Debtors may want to research all their options so that they can make a well-informed decision.

Source: Sports Illustrated, "Jack Johnson's bankruptcy a sad but common story for athletes," Allan Muir, Nov. 20, 2014

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