John L. Smith is an Arkansas coach who may have gotten in a little over his head with an investment group along with five other people. According to USA Today, he filed for bankruptcy two weeks ago when he realized that he was unable to fulfill the financial requirements for the investments he made. September 19, his first filing, he reported that he had $25.7 million in liabilities and only $1.2 million in assets. Yesterday Smith returned to the court to amend his original claim and significantly change the numbers of his financial liabilities. He increased them to $40.7 million, just $15 million in differences.
At this time, Smith is taking whatever actions he can in order to climb out of the debt, with his updated documents he also recorded that he cashed in one of his life insurance policies, as well as stocks and joint annuity with his wife. These steps were taken so that he would be able to make his usual bill payments as well as have a little more money in his checking account. He chose to file for Chapter 7 bankruptcy which means that he wanted all of his debt to be liquidated, or eliminated. While there are exceptions for what debt can be cancelled out, a person’s credit card debt and the like is included. In his original claim he stated that he only had a physical $300 of pocket change, and most of his assets (which add up to $1.3 million) rest in his retirement accounts.
John Smith and his wife were financially stable until he made the decision to join the group of investors and where they basically would “bet” on real estate in hopes of gathering a large profit. He joined this group in 2006, and soon after the housing market quickly lost value and he lost a lot of money. At this time he owes $20 million to Terra Springs, LLC, which is a company that would buy their loans in order for them to make the real estate investments and then another $15 million to Branch Banking & Trust; both of which are connected to the investors group. The judge unfortunately felt no pity for Smith’s debt because he had ample time to research and read over the documents and claims in all of his investments. The judge noted that Smith has a lot of experience with business, and therefore these results should have been no surprise to him.
Sadly, filing for bankruptcy was just another hard situation he has had to face this year. His brother died just two weeks ago in Idaho where he had to travel to attend the funeral. Also, his Razorbacks team is not doing too well in their football season so far even though they ended last season as national champions. For Smith to come to the place where he acknowledged that he was not able to pay back his debt was a huge step to take, though now under the protection of bankruptcy, the creditors are no longer able to harass him for their payments.
Recovering from bankruptcy is not an easy oath to take, but it is entirely possible with determination and discipline. Choosing to file for bankruptcy is a big step, it is acknowledging that you have no control over your debt and are ready to take action. If you are considering doing so, contact Malaise Law Firm today for a trusted bankruptcy attorney that you deserve! We have years of experience helping our clients in a variety of debt situations, and we want to help you decide what the best route for you to take is.