“It’s a tough fall for a man who earned $5.1 million in 1994 as the Texas Rangers’ designated hitter,”remarks the Worcester Telegram about Jose Canseco’s bankruptcy filing a couple of weeks ago. Well, for me as a longtime debt consolidation lawyer offering Indiana bankruptcy help, a sports stars filing for bankruptcy is no big surprise. What was a surprise was how well Canseco captured the essence of his reason for filing bankruptcy Chapter 7 in a tweet – one well under Twitter’s 140 character maximum: “Everyone deserves a second chance in financial situations,” he said.
As a reminder to readers of these Bankruptcy in Indiana articles, bankruptcy Chapter 7 is a liquidation, in which the trustee appointed by the bankruptcy court attempts to find assets that can be sold to help pay creditors. However, in each state, there are exemptions, assets that the debtor is allowed to keep. (In fact, as one of fewer than a dozen Certified Consumer Bankruptcy Specialists, I helped write the exemptions portions of Indiana bankruptcy law.)
Former major league star Canseco, like 97% of debtors who file personal bankruptcy in Indiana,
has claimed almost all of his assets as exempt, including his car and his clothes. His debts are made up in large part of tax liens by the IRS.
One very common myth is that taxes can’t be discharged through bankruptcy. But, although that’s true of withholding and sales taxes, every attorney in the five Zuckerberg bankruptcy law offices can attest to the fact that we get rid of old income taxes for our clients all the time.
So, no, I wasn’t surprised to read about Jose Canseco. After helping more than thirty thousand people file individual bankruptcy in Indiana, I can tell you that quite often, people with very high incomes can still become overwhelmed by events beyond their control and turn to bankruptcy to get back on their financial feet.
The new bankruptcy laws of Indiana were developed out of federal laws that go back 200 years. Long before there was a Twitter, Elizabeth Warren, American bankruptcy law expert and now special advisor for the Consumer Financial Protection Bureau under the Obama administration said, “Most debtors are filing for bankruptcy not because they had too many Rolex watches and Gameboys, but because they have no choice.”
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg