Denver Broncos fans might be interested to learn that the economy is tight for many, including former NFL defensive tackle Warren Sapp who owes more than $6.7 million to various creditors, as well as back child support and alimony payments. Apparently Warren Sapp can't tackle his debts and, according to court records, he filed for Chapter 7 bankruptcy protection last month. The former NFL veteran has $6.45 million in assets, which includes 240 pairs of Jordan athletic shoes valued at $6,500.
Sources report his current monthly income to be a little under $116,000, which included a final payment from his Showtime contract of $48,000 for appearances on CCA Sports and an advance on a book deal of $18,675. The 13-year NFL veteran also has a contract with the NFL Network which ends in August. It is unknown whether that contract will be renewed.
Unlike a Chapter 13 bankruptcy, which is considered a debt reorganization plan, a Chapter 7 bankruptcy is a liquidation type bankruptcy. Chapter 7 bankruptcies are the most commonly filed of the two bankruptcies as it allows the debtor to discharge much of his or her unsecured debts through the approval of a bankruptcy court. Both Chapter 7 and Chapter 13 bankruptcy proceeding provide debtors protection from collection efforts by creditors while the debtor pursues a discharge or reorganization plan to repay debts through the court system.
A Chapter 13 bankruptcy is available only to individuals, whereas a Chapter 7 is available to individuals, married couples, corporations and partnerships. In a Chapter 7, a trustee is assigned to liquidate non-exempt assets. The majority of household items, clothing and qualified retirement funds are considered exempt from the bankruptcy proceedings. No indication was provided on whether Mr. Sapp's 240 pairs of Jordan athletic shoes would be considered exempt or non-exempt assets in this case.
Source: South Florida Times, "Warren Sapp files for bankruptcy," April 12, 2012