Arkansas’ head football coach John L. Smith, who filed for Chapter 7 bankruptcy in September, could be facing more legal problems after a creditor has called Smith’s finances into question. The coach listed $40 million in debt when he filed for bankruptcy protection, with approximately $600,000 owed to the suspicious creditor, RL BB Acquisition.
Under federal law, all money made after an individual files for bankruptcy is kept by the individual, while all money made before the filing is divided among creditors. According to USA Today, Smith arranged to have most of his $850,000 salary backloaded until after the football season was over, which would allow him to keep this money since he would have technically earned it after filing.
RL BB Acquisitions has asked the bankruptcy court for an extension on the case so it can challenge Smith’s financial exemptions. With the exemptions, the coach able to report that he made only $19,800 a month in gross monthly income instead of more than $70,000. Smith’s financial problems stem from real estate deals that backfired when the market crashed.
If you are struggling with your personal finances and are considering filing for bankruptcy, an experienced bankruptcy attorney can inform you of your legal options. To learn if Chapter 7 bankruptcy is right for you, contact the legal team at Hong Law, PLC at 319-632-1400.
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