Vick’s Plan for Filing Bankruptcy Approved

Now that Michael Vick is back in professional football he’s trying to get his finances back in the black.

Last week Vick’s plan for filing bankruptcy was approved by a U.S. bankruptcy judge.

Most bankruptcy cases don’t require this much back-and-forth or this many meetings, rulings and payment plans. But, with more than $20 million owed to numerous creditors, this isn’t your average bankruptcy filing.

Vick’s financial problems stem from dog fighting charges that took him out of the NFL and into a federal penitentiary. He racked up huge legal bills and, because of missed playing time, he had to payback bonus money to his former team, The Atlanta Falcons, and an agent.

The big expenses led him to file bankruptcy. For the average person filing Chapter 7 bankruptcy, the process might go fairly quickly, and the property you would be allowed to keep would be clearly spelled out by your state’s bankruptcy exemptions.

And while Chapter 13 cases are often more complex, few personal bankruptcy cases approached the level of complexity that Vick’s did.

His original filing attempted to protect several houses and a fleet of expensive cars and boats. He claimed he would be making $5 million a year upon his return to the NFL.

A judge threw this plan out, and probably with good reason. Upon being reinstated to the NFL, there were reportedly  huge question marks about Vick’s character and abilities. He finally signed with the Philadelphia Eagles for $1.62 million, although after incentives he may make as much as $2.8 million.

So a new bankruptcy plan was created. This one includes a sliding scale of payment to creditors. Essentially, the more money Vick earns the more he will pay back. From the Boston Herald’s coverage:

“He gets to keep all but 10 percent of everything he earns below $750,000. He will pay 25 percent of any income between $750,001 and $2.5 million. He’ll pay 30 percent of his income between $2.5 million and $10 million, and 40 percent of anything above $10 million.”

In addition, Vick will be allowed to keep his home in Hampton, Va., a truck, personal items and retirement accounts. He will, however, be forced to sell four homes, several cars and boats. Vick will also have to live under a strict, court-approved budget.