Former Tennessee Football Player Files Chapter 11 Bankruptcy

Football player Jamal Lewis, who once played for the Tennessee Volunteers and went on to have a professional football career in the NFL, filed for bankruptcy in June of 2012. While stories about professional athletes with money troubles are not uncommon, what may be surprising about Lewis' case is that he filed for Chapter 11 bankruptcy protection - the type most people associate with business reorganizations. Chapter 11 bankruptcy is available to individuals in some cases and offers people several benefits.

High Assets, High Debts

In his bankruptcy petition, Lewis listed $14,455,854 in assets, including five houses, several cars and part ownership in a water park in Ohio.

Lewis may appear to have a lot of money, but he also listed $10,566,764.18 in debts on his petition. Bank of America has a lien on Lewis for $947,876 and auto makers Benz and Chrysler have liens for a total of $128,000. M&T Bank also obtained a judgment against Lewis for over $350,000 after they claimed he defaulted on a business loan. Other creditors say he owes them for failed business attempts, such as a trucking company he tried to start, and for the construction of some of his homes.

Chapter 11 for Individuals

Lewis' financial situation is an excellent illustration of when an individual, rather than a business, would file Chapter 11 bankruptcy. Chapter 11 bankruptcy is "reorganization" bankruptcy, similar to Chapter 13 bankruptcy. People who want to restructure debt but have liabilities that exceed the limits of Chapter 13 may need to file Chapter 11.

When determining whether a person needs to file Chapter 11 bankruptcy rather than Chapter 13, the court looks at the amount of secured and unsecured debt a person has. The calculation can get complex, as the court will assess not only how much a person owes on property, but also the property's value, when looking at secured debt.

Benefits of Bankruptcy

For people who qualify, Chapter 11 bankruptcy can offer several protections while allowing filers time to restructure their finances. Chapter 11 can also help a person save a home from foreclosure or save a vehicle from repossession, as filing bankruptcy puts an automatic stay on all collection actions by creditors. Creditors may not even contact a debtor once he or she has filed a bankruptcy petition.

Talk to a Lawyer

Deciding whether to file bankruptcy and which type to file is a complicated decision that one should not make without legal guidance. If you are considering bankruptcy, speak with a qualified bankruptcy attorney who can advise you about your options.