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College football coach John L. Smith files Chapter 7

Residents of Tennessee who may be facing financial challenges may be relieved to learn they are not alone. It isn't just "regular" people who must turn to Chapter 7 bankruptcy for a fresh financial start, but also celebrities, football coaches and well-known people who we often assume are financially stable.

Football coach John L. Smith of the Arkansas Razorbacks recently announced that he was filing for Chapter 7 bankruptcy. He had planned to file in July for debts incurred through the failing real estate market, but like many debtors, had attempted to avoid it. He signed on for a 10-month contract with the Razorbacks for $850,000. But, according to the U.S. Bankruptcy Court, although Smith's assets totaled between $1 million and $10 million, his debts actually totaled between $10 million and $50 million.

According to Smith, he lost money on land investments made while coaching Louisville between 1998 and 2002. He added that while he did not want to embarrass the school, he had made some mistakes.

This is a common feeling for consumers who face overwhelming debt and must file for Chapter 7. However, the benefits of liquidation and the debt relief that bankruptcy provides should outweigh the embarrassment of filing for Chapter 7. Chapter 7 may also provide consumers with some stress relief, as filing may stop creditor harassment, stop wage garnishment and sometimes stop mortgage foreclosures. Faced with the choice of keeping one's home and feeding one's family, filing for bankruptcy may be the only solution that can help avoid the need to make that terrible choice.

Source: Fox Sports, "Arkansas' Smith files Chapter 7," Sept. 7, 2012

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