Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

Football Players Regularly File Bankruptcy

Some people feel discouraged from talking to a New York bankruptcy lawyer because they believe bankruptcy is something only irresponsible people do. That’s understandable, if misguided. Occasionally, however, the news provides opportunities to reassure people of the truth. For example, in April the National Bureau of Economic Research (NBER) published a paper researching “short-lived income spikes” among NFL players.

The NBER paper addresses the trope about the superstar who gets rich too quick, wastes the money, gets injured (or whatever), and then goes broke. Really, it’s at least as old as the tortoise and the hare, so empirical research on the subject is welcome. Thus, the researchers’ question isn’t about football players per se; rather, it’s the “life-cycle hypothesis,” which says that people save money when they accumulate income to spend it when they don’t. The hypothesis predicts that athletes, with their large early age incomes, will save much to prepare for when they can expect to have lower incomes after they retire.

According to the paper, a 2009 article in Sport’s Illustrated stated that just two years after retiring from the NFL, 78 percent of players filed bankruptcy or were otherwise under “financial stress because of joblessness or divorce.” That latter part may not include a bankruptcy, which is why the NBER’s insight can be helpful. The researchers focused on NFL players between 2000 and 2003.

Despite players’ accurate foreknowledge of the kind of income cycle they could expect to have, the researchers found that bankruptcies “begin to occur very soon after retirement and continue at a substantial rate through at least the first 12 years of retirement.” Specifically, after two years not even 2 percent of players had filed bankruptcy, but by 12 years 15.7 percent had. The authors discussed two additional bleak points: One, the highest-paid players were no less likely to file bankruptcy than the typical player, and two, players with longer careers also weren’t less likely to file bankruptcy. So much for the life-cycle hypothesis.

Most New Yorkers who file chapter 7 don’t have much in common with NFL players, i.e. not earning millions of dollars in several years. What they do share, though, is that job losses precipitate bankruptcy filings. Thus, if you’ve lost your job, then you shouldn’t feel bad about filing bankruptcy. The pros do it too.

The NBER paper can be found here, but here’s a link to a free, earlier draft (pdf).

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top