Author Archives: Kurt O'Keefe

Michael Vick Bankruptcy Over

After paying over 17 million dollars to

individual Chapter 11 bankruptcy
Chapter 11 bankruptcy concluded

his creditors, Michael Vick’s Chapter 11

bankruptcy case is finally over.

ESPN spoke with Joseph Luzinski, a senior vice president at Development Specialists Inc., a management consultation firm and the liquidating trustee in Vick’s bankruptcy. He praised Vick for his commitment to paying off the creditors. “Paying 99 cents on the dollar, which he did, is remarkable,” Luzinski said. “It happens in, maybe, one out of 100 cases.”

Well, a person is not usually liquidated in a any chapter bankruptcy case.

In individual Chapter 11 cases, you are your own trustee, unless a court appoints one.

This is usually done only where the creditors do not trust the debtor, the person filing the bankruptcy case.

A corporation, contrary to an individual can be liquidated.  Many corporate Chapter 11 cases are filed so that the corporation can control its liquidation and get maximum value for its assets.

I have filed these myself, where everyone wanted the restaurants to stay open, as they fetch a lot more money as a going concern than shuttered buildings.

Hard to find details on his case, but, some things are known.

Why Would A Consumer/Individual File Chapter 11 Bankruptcy?

Chapter 13 is a payment plan bankruptcy, that most individuals file, but, it has a debt limit.

If you owe more than a specified amount of secured debt, or unsecured debt, you are ineligible for Chapter 13 bankruptcy relief.

Vick owed more than 17 million dollars, so, WAY over that limit.

Why Not Chapter 7 Bankruptcy?

Chapter 7 bankruptcy wipes out debts.  You pay nothing.

After the infamous dog-fighting scandal in 2008 derailed his pro football career and ended his endorsement deals, Vick was forced to file bankruptcy. Once he was reinstated in 2009, he reportedly made $50 million from the NFL before officially retiring on February 3, 2017.

To stay in a Chapter 7 bankruptcy, your income, after living expenses, has to be insufficient to pay creditors anything.  Mr. Vick had a problem in that area.

But, if he has to pay anyway, what is the advantage of filing Chapter 11 bankruptcy?

Well, you can go longer than the 5 year maximum for Chapter 13 bankruptcy plans.

And, you stay in control of your finances.  No foreclosures, garnishments, or repossessions.

And you do not have to pay 100% of the debts.

That depends on your income after expenses, and the value of your assets compared to the amount of your debts.

Chapter 11 can be a useful tool to resolve some tough issues.

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What Is A Bankruptcy Cramdown?

Bankruptcy attorney who does cramdowns

I get complaints that some of my blog pictures are, well, crude, so in lieu of a crude bankruptcy cramdown picture, I selected a nice one of me. Bankruptcy Cramdown There are lots of what we lawyers call “terms of art” in bankruptcy, or whatever field of practice applies. In bankruptcy, a cramdown is paying aContinue Reading

Debt Bubbles

Bubbles don’t end well, remember the real estate bubble that burst in 2007-2008? Debt Bubbles A (debt) bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior.  Uh, yeah,Continue Reading

Bankruptcy And Personal Finances

Having to file bankruptcy is frequently the result of not knowing how to handle personal finances. Every test, quiz, whatever that I see shows the same thing: financial illiteracy. “If we extrapolate these results across the 240 million adults residing in the US, we can estimate that – collectively – lack of financial knowledge costContinue Reading

Do I Need An Attorney To File Bankruptcy?

What happens to people who file bankruptcy  without an attorney? (Like the certified bankruptcy attorney in the picture, Kurt OKeefe) Across the country, we’ve found how the costs of filing have, in various ways, caused harm to those bankruptcy was designed to serve. Earlier this year, we reported on how black Americans in the SouthContinue Reading

Filing Bankruptcy – The Smart Move? – Two

Picking up from last week picking apart  Steve Rhode, though written by Rick Abelmann here Personal Finance Syndication Network. This blog post is dedicated to tearing apart this: Don’t File If You Are About To Receive A Large Sum Perhaps this is another no-brainer, but you should not file for bankruptcy if you are about toContinue Reading

Filing Bankruptcy – The Smart Move?

Detroit bankruptcy court

Riffing off Steve Rohde on the Huffington Post on Filing Bankruptcy – The Smart Move? Of course, it depends on your situation. Bankruptcy is not a moral decision. It is a legal choice made when the debt situation is hopeless. I am certainly not recommending bankruptcy as a casual solution and I’ve seen very few peopleContinue Reading

Bankruptcy Fraud

Interesting bankruptcy fraud case in my hometown, Detroit. I frequently blog about telling the truth to your lawyer, and that you are signing your bankruptcy papers under penalty of perjury. Now, these are allegations at this point, so the former Rosa Parks attorney who filed bankruptcy may not be the same form of life asContinue Reading

Bankruptcy Potpourri

Let’s see what I saved in the bankruptcy grab bag this week. Bankruptcy filings follow debt.  Debt goes up, bankruptcy filings go up. How high is our credit card debt now? Maria Lamagna on the Market Watch site: They now collectively have the most outstanding revolving debt — often summarized as credit card debt —Continue Reading