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Even The Rich & Famous File Bankruptcy

By Cathy Moran

Highly paid and bankruptESPN tweeted the names of some 60 professional athletes who have filed bankruptcy and asked which names surprised the Twittersphere.

Included were Johnny Unitas,  Bernie Kosar, Mike Tyson, Dorothy Hamill, Gaylord Perry of my very favorite baseball team, and  Roscoe Tanner, from my very favorite university.

While titillating reading, none of them surprised me.

Bankruptcy is not really about not having too little money;  it’s about having debts greater than you can pay.

Highly paid athletes filing bankruptcy is just the individual reflection of big corporate bankruptcies by GM, UAL, Trump Entertainment,  and Lehman Brothers declaring bankruptcy.

Lots of cash flow doesn’t insulate one from downturns.  Financial advisors, MBA management, agents and managers. None of them insure success.

Part of business is the reality that a substantial number of ventures fail.

More Rich and Famous 

A favorite book of bankruptcy lawyers is They Went Broke, featuring familiar names who suffered financial setbacks:  Walt Disney, Harry Truman,  John Wayne, and Gloria Vanderbilt.

Five years into the Great Recession, my clients follow suit.  Financial stress is catching up with  Silicon Valley residents with substantial, or formerly substantial, incomes. Investments and risks that weren’t out of proportion before the recession are now unsustainable.

Lots of people were caught up in the real estate bubble.  The bigger their income, the more likely they bought the dream of retiring on their real estate investments.

While three years ago, I often filed for those who bought a single rental, mortgaging their home, now I’m seeing couples with a string of investment properties who need bankruptcy relief.

What’s the take away, after you are done imagining what these athletes must have done to overspend their grand incomes?

Money troubles happen everywhere, up and down the income ranks.  More bills than income isn’t confined to the poorly paid, the uneducated, the foolish.

The real  tragedy is when pride or stubbornness keeps the hurting from getting help.

Image courtesy of jp3sketch. 

 

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Filed Under: Considering Bankruptcy

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Bankruptcy Basics

About The Soapbox

You’ve arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said “try”).

Here, I allow myself to tell stories and express strong opinions. We dig deeper into how to consider bankruptcy and navigate a bankruptcy case.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

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