If you live in Pittsburgh, there’s a good chance you are a Steelers fan. Some fans even idolize the larger-than-life figures that have had a “Terrible Towel” waved their way. But with the larger-than-life talent come larger-than-normal salaries. Which lead to larger-than-normal lifestyles. Which may lead to larger-than-normal debts. Which may lead to bankruptcy court.
According to a recent study, almost 16 percent of NFL players drafted between 1996 and 2003 filed for personal bankruptcy within twelve years of retirement. This correlates with a Sports Illustrated article from 2009 that found 78 percent of former NFL players either filed for bankruptcy or suffered major financial difficulties within two years of retirement. The Sports Illustrated statistics were so alarming to the League that the NFL Players Association started a program to educate players on financial wellness.
Your first thought may be what do bankrupt NFL players have to do with me? Truth is, you have a lot in common with these players’ financial pitfalls. While theirs may involve millions of dollars and your only hundreds, the principles are the same: when debt exceeds assets and/or income, you meet the legal definition of “bankrupt.”
One point made by the recent study that seemed to indicate a difference is that NFL players have a different financial life-cycle than people in most other professions. They know going in that their job will only last a limited time. But many don’t spend or save accordingly. The millions are there so they live like millionaires, rather than planning for the future. But is this so different from people in other professions? Have you ever gotten a bonus, or even a tax refund, and your first impulse is to splurge? You go on vacation or buy a new car instead of paying off debt or putting the money into savings.
The Sports Illustrated article found four financial habits that cause problems for NFL players, but they are not so different from bad financial decisions made by other Americans. Those habits include: bad business investments, bad financial advice, divorce and other family matters.
The point is that anyone making any amount of money can find themselves in financial trouble. How much money you had and how you lost it are rarely at issue. If you find yourself in this situation, a bankruptcy attorney in Pennsylvania can give you advice on your options.
Source: CBS News, “1 in 6 NFL players go bankrupt,” Aug. 13, 2015