Antoine Walker, former professional NBA player
Shareif Ziyadat | Getty Images
In 2008, at the end of his 13-year basketball career, Antoine Walker had raised $ 108 million.
Two years later, he had nothing left.
âI entered the league when I was 19,â he said. “I come from humble beginnings, so I was not at all used to having money.”
When he started making money, he didn’t understand the concept of a dollar, he said. He has also developed aggressive spending habits – spending on cars, clothes and jewelry as well as helping family and friends. The rest of his money was lost in real estate investing when the market collapsed after the Great Recession.
This led him to declare Connecticut bankruptcy in 2010. Two and a half years later, he had rebounded.
Today, he helps others avoid the money problems he has overcome. He is a consultant with Edyoucore, a financial literacy company that focuses on teaching athletes how to manage their money.
There are a few things people should keep in mind before declaring Connecticut bankruptcy. The timing of the deposit – if that makes sense – is important.
âIf you are faced with the loss of your home, car or garnishment, any of these events is an emergency and it might make sense to file for bankruptcy immediately,â said Sarah Bolling Mancini, lawyer for the National Consumer Law Center. .
Beyond an emergency, it may be a good idea to file a return if you have a crushing debt that you won’t be able to repay and it has peaked, which means you’re still running out of debt. of debts.
Typically, in this case, it makes sense to already be getting out of debt.
“If you don’t see your financial situation improving after bankruptcy, now is not a good time to file a complaint,” said Robert Lawless, professor at the University of Illinois School of Law. “Bankruptcy won’t put money in your pocket, it forgives past debts.”
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Chapter 7 vs. Chapter 13 Bankruptcy
Before filing for bankruptcy, people should be aware that there are two different types for consumers – Chapter 7 and Chapter 13.
Walker was able to file for Chapter 7 bankruptcy, he said, which is also known as liquidation or direct bankruptcy.
In this process, all unsecured debt – think personal loans, credit cards, and some medical bills – is wiped out, but a court will take possession of your assets such as your property. A court-appointed trustee will handle your case and may sell some of your assets to cover your debts.
In Chapter 13 bankruptcy, you typically retain ownership of your assets and get a more affordable payment plan from your creditors. However, you must meet certain requirements – you must have sufficient income to pay your monthly payments and your debt must be less than a certain amount.
The limits for Chapter 13 bankruptcy in 2020 were almost $ 420,000 in unsecured debt and about $ 1.25 million in secured debt.
Because everyone’s situation is different, it makes sense to work with a bankruptcy lawyer to determine the best course of action.
Walker puts it that way. âYou are the CEO of your company,â he said. “You have to take responsibility for what you do, and you have to be on top.”
It means surrounding yourself with professionals who can help you succeed.
âYou have to have a CPA, financial advisor, agent, lawyer – these have to be separate but work together,â he said.
Whichever type of bankruptcy you choose, the process takes a few years before you are off the hook. Then you need to start rebuilding your finances.
An important part is having an achievable budget and sticking to it, according to Lawless. Additionally, after bankruptcy, people should be careful about taking on more debt – while rebuilding credit is important, it should be done with caution.
âThere are types of credit you can get, and the bottom line is not to immediately take offers,â Mancini said. “It is important to be careful and to approach things slowly and carefully.”
For Walker, rebuilding also meant accepting that his life might be different from what it was when he was in the NBA.
âI may never earn $ 108 million again, but I can have a comfortable lifestyle,â he said. “It’s my state of mind when I got back on my feet.”
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