Michael Vick accumulated $17.6 million in debts when he filed for bankruptcy in 2008, but he now he is debt free after making his final payment.
Vick paid back $17.4 million of the total debt and it was confirmed by Joseph Luzinski, a senior vice president at Development Specialists Inc, who has been managing Vick’s bankruptcy case.
After Vick made his final payment, Luzinski gave the following quote:
“Paying 99 cents on the dollar, which he did, is remarkable,” “It happens in, maybe, one out of 100 cases.”
The reason why what Vick did is so rare, is because most people facing large bankruptcy debts elect to file for Chapter 7 bankruptcy instead of Chapter 11 which Vick chose. With Chapter 7, Vick would have been allowed to liquidate his assets and not owe any more money. Since Vick chose Chapter 11, he elected to distribute his future income to his creditors. Usually, businesses choose Chapter 11 in order to remain in business while assets are liquidated.
On paying back his debts, Vick told ESPN the following:
“I didn’t want to stiff people who never stiffed me.”
Vick paying back his debts is the more noble route for sure, but may not be the most shrewdest decision. Either way he is now financially free, as he continues his new chapter in life.