Just the other day on the morning news, I heard a news bulletin about Michael Vick. Back in August I’d written about this unusual bankruptcy filing in my blog (see Michael Vick Files Chapter 11 Bankruptcy). Vick, once the National Football League’s highest-paid player, is serving time in a federal penitentiary in Leavenworth, Kansas for a dogfighting conviction. In my bankruptcy blogs, I’ve been emphasizing the fact that bankruptcy is not a single event, but a process, and there are many aspects to the Vick case that bring out how that bankruptcy process works.

One very important step in the process is the creditors’ meeting that is presided over by a bankruptcy trustee appointed by the court (see The Creditors’ Meeting – Be There Or Be Square). The whole idea, of course, is to help individuals who’ve fallen on hard times to get back on their financial feet, while still treating all the creditors fairly. In order to do that, as I brought out in the case of another celebrity figure, Anna Nicole Smith, all the assets a person has need to be considered, including potential assets.

With Michael Vick, he says he plans to play in the NFL again, and use the money he earns to pay back his creditors. (Right now, Michael’s suspended indefinitely from the league because of his conviction, and that was the subject of the interview I was hearing about on the news.) Meanwhile, I learned, with Michael Vick listening in on the conversation from prison, his attorneys asked the federal bankruptcy judge to appoint a mediator to help settle his debts One interesting aspect they brought out is that, if all the assets were to be liquidated now to pay creditors, that could hinder Vick’s ability to get back into the NFL.

When I first wrote about the Vick case, I stressed the fact that, while I have dealt with tens of thousands of bankruptcies, they have involved everyday working people rather than celebrities. Needless to say, confidentiality is the rule, and no details of any case would ever be shared outside the legal process. But because the celebrity cases are in the news, I see them as a tool to illustrate the underlying principles of the bankruptcy system.

Vick’s attorneys said it all, “He is in the process of paying his debt back to society for the federal prosecution. This (meaning the bankruptcy) will give him the opportunity, when he gets out, to start his life fresh.”