Jamal Lewis Files for Bankruptcy Protection
Lewis Becomes Latest NFL Bankruptcy Casualty
The former NFL player (seven seasons with the Baltimore Ravens and three seasons with the Cleveland Browns) Jamal Lewis has filed for chapter 11 bankruptcy protection. Lewis, who finished his professional football career in 2010, now is self-employed and earns about $35,000 per month. That means he is making $420,000 a year and is still seeking bankruptcy protection. Sounds crazy right? It’s not, it’s true! It is reported that Lewis has accumulated a huge debt, which he is struggling to pay off — including five homes, expensive cars, and business ventures.
Sports Illustrated reports that within only after two years of retirement, almost 80% of NFL football players are bankrupt or in financial trouble. It hardly seems possible for these athletes who rake in millions could be broke. Unsuccessful business investments, gambling, outrageous spending habits, and even divorce, and child support payments tap out the bank accounts much faster than the former NFL players can imagine.
Many of the same things that cause these professional athletes to file bankruptcy are the exact same things that lead to individuals, couples, and businesses in Arizona to declare bankruptcy. Both the “rich and famous” and the regular people of Arizona are financially affected by such things as: Loss of Job, Divorce, Gambling Debts, Poor Spending Habits, and Child Support Payments. In many ways the two aforementioned groups are a lot alike.
Possibly financial illiteracy combined with irresponsible choices and mismanagement of money causes a seemingly well-paid athlete to declare bankruptcy. Most players who get paid a good chunk of their salary right away tend to spend it quickly. They assume that the money will keep flowing in this manner for years, this is not usually the case with NFL players. A lot of times the enormous paychecks end when the player’s playing days end. Few people (famous or not) are good at handling sudden wealth, even fewer people are good at making the adjustment from making huge sums of money to not making much money.
The average professional football career only 3 ½ years, this is not the usual case when looking at other professions. In an “average Joe” occupation, workers anticipate an increase in earnings (usually yearly); the longer time spent with a company, the more raises and income a person expects to earn, where as pro athletes, even if they play for many years, will eventually have to downsize their finances. They get a lot of money up front, which is different than other professionals who have a considerably longer career and can expect to make more money for years in the future.
Until recently, nothing has been done to help protect NFL players regarding debt relief and management of their finances. The NFL has now implemented a program to help NFL players protect their finances and offers resources for its players. (It’s about time!) The league conducts workshops for rookies that cover topics ranging from gambling, personal finance, substance abuse, and domestic violence. Perhaps additional long-term financial planning, debt relief exercises, and even quality bankruptcy information may be helpful to both rookies and retired veterans alike.