Every person in New Jersey and nationwide has likely faced money troubles at one time or another. This may be truer in the current economy as people struggle with medical bills and unemployment. However, there are other issues that can contribute to rising levels of personal debt. When it comes to professional athletes in particular, years of enormous paychecks and endorsement deals can create a false sense of financial security. When an athlete’s career as a player is over, he or she can often be left with mounting bills and rapidly dwindling levels of income.

Former NBA star Allen Iverson is facing this very same challenge. For more than a decade, Iverson played professional basketball and earned an estimated $150 million throughout his career. However, with that hefty sum of money coming, Iverson adjusted to a different type of lifestyle.

Iverson reportedly owns several homes and luxury vehicles. He spends $10,000 a month on clothing and roughly $20,000 on food. He pays creditors more than $125,000 monthly and is currently going through a contentious divorce. All of this money was likely manageable during his successful career, however now he pulls in monthly earnings of $62,500 which is nearly $300,000 short of what he spends during that time.

With this rising level of debt, Iverson has been unable to keep up with the mortgages on at least one property. His home is now in foreclosure after he defaulted on payments. He has other assets, however, that he is likely determined to keep, like a $400,000 Maybach car.

In many cases, athletes in this position may consider filing for bankruptcy. The level of debt relief that a person is eligible for is dependent on a variety of factors and the process often requires the help of a bankruptcy attorney. For some, it may be appropriate to pursue Chapter 7 bankruptcy, which discharges all credit card and other types of unsecured debt. For others who wish to keep their home and car, a reorganization of debt with Chapter 13 bankruptcy may be the right choice.

Any situation involving debt, harassing collection calls and bills that are piling up can leave people stressed and lost. However, seeking help in dealing with this financial struggle can be the first step in overcoming it and moving forward towards a more positive and enjoyable future.

Source: The Huffington Post, “Allen Iverson Heavily In Debt, Court Documents Reveal Where His Money Goes,” Dec. 5, 2012

• Our firm is dedicated to helping people find a solution to debt. For more information on our services, please visit our New Jersey bankruptcy page.

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