Michael Vick Has Spent Over $29 Million Since Filing for Bankruptcy ...

Michael Vick, whose career has taken a remarkable turn after his imprisonment for running a dog fighting ring, has spent over $29 million since filing for bankruptcy in 2008, according to a report from USA Today.

Most of the money, however, has not gone to luxury items. Sources say that the football player did not discharge his debts in bankruptcy, but instead created a re-organized debt payment plan.

The payment plan allows Vick to repay his creditors at a much more reasonable pace, but it still means he has to pay a large portion of his old debts.

Bankruptcy Helps Michael Vick Repay his Creditors

Life after Bankruptcy isn?t always a cakewalk, as it may involve continued debt payments to creditors, but bankruptcy can certainly make the debt load more manageable, as Vick recently discovered.

When Vick was released from prison after being convicted for his role in a dog fighting operation, he had tens of millions of dollars in debt, according to sources.

So in 2008, Vick sought to create a re-organized payment plan in bankruptcy court. His strategy worked, and Vick accepted a reorganization plan that allowed Vick to only pay 66 percent of what he owed to his creditors.

In addition to receiving a discount on the debts, Vick was also given an extended period of time to earn more money so he could repay the debts at a slower pace.

The bankruptcy judge also ruled that Vick could keep $300,000 of his annual earnings for basic living expenses like rent, car payments, and school tuition for his children.

Vick?s Filing Shows Flexibility of Bankruptcy Courts

In the bankruptcy agreement, Vick agreed to pay his creditors on a sliding scale based on his annual earnings. So if Vick earned under $2.5 million, he would only have to pay 25 percent of his income.

Last year, however, Vick signed a six-year contract that will pay him roughly $12.5 million per year. As a result, Vick is expected to spend 40 percent of his annual income on repaying his old debts.

Over the past few years, Vick has earned $31 million, and spent $29.6 million. This isn?t exactly a sign of advanced savings, but sources say that most of the spending has been put towards repaying creditors.

And Vick?s decision not to save right now could be wise in the long run. Sources indicate that Vick could completely pay off his creditors by 2014.

Source: http://www.clearbankruptcy.com/blog/michael-vick-has-spent-over-29-million-since-filing-for-bankruptcy/

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