It’s no secret that professional athletes are some of the highest paid entertainers. So why is it that many of them up end filing for bankruptcy? Turns out the answer is a little more complicated than simply leading a baller lifestyle.
Famous Athletes Who Filed Bankruptcy
- Mike Tyson: purchased one too many Siberian tigers
- Allen Iverson: would buy new clothes each time he traveled to avoid carrying luggage
- Sheryl Swoopes: bad investments and greedy lawyers left her broke
- Terrell Owens: $50,000 a month in child support payments
Why the Trend?
According to Sports Illustrated: “By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress; within five years of retirement, an estimated 60 percent of former NBA players are broke. In an attempt to explain this trend, ESPN released a film in 2012 from their “30 For 30” series titled Broke, which explores both the obvious and not-so-obvious reasons sports stars tend to burn through their millions.
The Obvious
- Athletes Go Pro in Their Early Twenties
- Too young to have experience budgeting, investing, saving
- Extravagant Lifestyle and Wealthy Image
- Big homes, fast cars, expensive jewelry, furs, exotic travel, lavish parties, high stakes gambling
The Not-So-Obvious
- High Pay = High Tax Rates
- Lawyers and Agents have Large Fees
- Constant Relocation Expenses if Traded
- High Impact Sports Have Short Careers
- Injuries Cut a Career Short
- Medical Bills are Expensive
- Obligation to Help Family and Friends Financially
- High Child Support Fees
- Lack of Sound Financial Advice = Easily Frauded and Manipulated
- Pressure to Make Bad Business Investments (Car washes, restaurants, etc.)
Bankrupt Athletes: They’re Just Like Us
Sports stars aren’t the only ones who find themselves in over their heads. If you’ve been ballin’ a little too hard, or if your financial burdens keep growing, find out if filing for bankruptcy is an option for you. Give a call today to set up an initial consultation with our experienced bankruptcy attorney.
