Along the same lines as the person who won the lottery and died without a penny, we often hear about current and former professional athletes who have earned millions of dollars and spent it all on themselves, leaving nothing left for themselves or their families. Bankruptcy is viewed as a very unpleasant way for individuals to erase their debts and be able to start fresh in their financial lives, but when certain factors like spousal support and child support are involved, not all debt can be erased.
Warren Sapp, a former all-pro NFL defensive tackle for the Buccaneers and then the Raiders, filed for bankruptcy in 2012, and while he had hoped this would give him a new financial start, there was over $700,000 of back child and spousal support that he owed to his family. Because of this large amount of money in familiar obligation that was part of his debt profile, he was unable to accomplish wiping the slate clean by filing for bankruptcy, since this large amount of money could not be forgiven by the government.
Sapp is not the only professional athlete to go through this, however – Antoine Walker, Evander Holyfield, Mike Tyson, Lenny Dykstra, Darryl Strawberry, and Lawrence Taylor (just to name a few) have also faced substantial family support obligations during a bankruptcy filing. With the divorce rate for professional athletes, actors, and musicians at almost 80 percent, it is very important that lawyers working with these high profile individuals understand how bankruptcy can affect a celebrity’s significant obligations that are the result of divorce and the family court system.
What many divorcing parties do not know is that any unpaid support, whether it is spousal or child support, cannot be erased during a bankruptcy filing. Section 523(a) of the Bankruptcy Code, 11 U.S.C. Section 523(a) states that specific obligations cannot be discharged by filing bankruptcy. One of these listed obligations is “domestic support,” which often includes both spousal support and child support. While this may seem to be outlined very clearly, many courts have been liberal about interpreting what “domestic support” means when it comes to the bankruptcy codes.
So, while celebrities and professional athletes like Sapp may get some relief by filing for bankruptcy, they are not able to escape from the sizable burden of their familiar court obligations. This is why those celebrities on the path to financial ruin need much more than professionals to help them manage their money – they should also seek the assistance of skilled family law attorneys to help modify their child support and spousal support obligations, so they can become more manageable.