Michael Vick makes progress on bankruptcy repayment plan
When pro football player Michael Vick was released from prison in 2008 after serving his sentence for dog fighting, he was facing significant debt from multiple creditors, including his former team, the Atlanta Falcons.
Soon after his release, Vick filed for Chapter 13 bankruptcy, which allowed him to set up a reorganization and repayment plan with the goal of paying a considerable portion of his debt. According to a new report on Vick’s ongoing bankruptcy case, he is making significant progress toward that goal, and could pay off his debt earlier than the 2015 deadline that was set by the bankruptcy court.
Since Vick filed for bankruptcy, he has earned about $31 million. He has reportedly spent about $29 million of those earnings. The majority, however, has gone to his creditors to repay his bankruptcy debts.
Under Vick’s bankruptcy plan, he was ordered to hand two-thirds of every dollar he earned over to his creditors. However, he was allowed to keep $300,000 per year for living expenses.
Moreover, the amount of his earnings he had to pay depended on his income. For example, if he earned less than $2.5 million per year, he would have to pay creditors 25 percent of his income. Under his current six-year, $100 million contract, he is required to pay his creditors 40 percent of the reported $12.5 million base salary he will earn this year.
If he continues to earn at that level, reports indicate that he could pay his debts by 2014, well before the 2015 end of his court-ordered repayment plan. However, if his current football team chooses to release him before his contract is complete, he may find himself unable to maintain his current repayment schedule.
Source: USA Today, “Michael Vick has spent $29 million since filing for bankruptcy,” Christopher Chase, Oct. 2, 2012