Former Oakland Athletics slugger Jose Canseco filed for Chapter 7 bankruptcy on July 31st of this year in Las Vegas, Nevada. In the filing, Canseco lists assets of $20,850 in personal property, liabilities of $1,685,696.00, and a monthly income of $7,500. Of his liabilities, he lists more than $500,000 as owed to the Internal Revenue Service.
You may be asking yourself how someone like Jose Canseco, who was once paid millions of dollars to play baseball, is filing for bankruptcy. In a recently posted blog entry attributed to Canseco, he explains some of the reasons himself:
“The issue is very simple: If you’ve got friends and family, the more money you make the more you spend on them. So let’s say you spend half your money on them and the rest on yourself and the cost of living. It may so happen that during all of that you forget to pay your taxes. And then all of a sudden penalties and interest start to add up, and you’re in a pool of quicksand from which you cannot escape.”
Canseco has filed for Chapter 7 bankruptcy, meaning that the Court will liquidate his non-exempt assets in order to satisfy his debts. It is unclear, however, how much of his tax debt will be discharged. Tax debt generally needs to be more than 3 years old to be discharged. In addition, the non-payment cannot have been the result of either fraud or evasion. Chapter 7 bankruptcy benefits people most whose liabilities outweigh their assets. Through Chapter 7 bankruptcy, many types of consumer debts (such as credit card debt) can be discharged, and individuals are able to keep certain types of exempt property. Exempt property generally can include:
· Equity in your primary residence
· Equity in a vehicle
· Household items
· Jewelry and heirlooms
· Trade tools
· Life insurance
· Spousal support
· Child support
· Public benefits
· Retirement fund
If you are in over your head financially, bankruptcy may be an option you should consider. Depending upon the specific circumstances of your case, a Chapter 7 (liquidation) or Chapter 11 (reorganization) bankruptcy may be right for you. At the Westbrook Law Group, you will meet with an attorney that practices exclusively in bankruptcy law, and will offer an objective analysis as to what course of action would be best for you to take. Our main office in conveniently located in St. Charles, Missouri, and we also have a satellite office located in Troy. We offer free consultations, and can meet with you in the evening or on the weekend, by appointment. To schedule your free consultation, call us today at (636) 493-9231, or fill out our online contact form to the right. Remember, your solution starts here.