They filed bankruptcy? (Baseball edition)

We are a little more than halfway through the baseball season.  We can hope the Twins make it to the playoffs AND that they don't have to face the Yankees.

Nowadays major league baseball players make a lot of money.  The minimum salary is $720,000 in 2023;  players like Byron Buxton and Carlos Correa make much, much more.

But baseball players are just people;  and like all people they can, and sometimes do, get into financial difficulty.

The following well-known players have filed bankruptcy:

Tony Gwynn (Padres), chapter 7, 1987

Lenny Dykstra (Mets and Phillies), chapter 11, 2009

Jack Clark (Giants, Cardinals, others), chapter 7, 2018

Gaylord Perry (Giants, seven other teams), chapter 7, 1986

Graig Nettles (Yankees, Twins, four other teams), chapter 11, 1988,

Rollie Fingers (As, Padres, Brewers), chapter 7, 1989

Jose Canseco (As, six other teams), chapter 7, 2012.

I hope you're not in financial trouble.  But if you are, just like the baseball players listed above, bankruptcy may help you through a  tough spot..  Feel free to call me at 320-252-4473.

About credit cards

 Long ago I wrote the following post:  

Clients often ask if they should stop paying their credit card bills before we file their bankruptcy case.

There are at least two issues.  The case to continue payments is that there is an argument that the more "lates" you have on your credit report, the lower your credit score will be. 

The counter argument is that if you need to file bankruptcy, you need to be saving your money to, for instance, catch up your home mortgage payments.  Money paid to the credit card company is gone and you are not going to get it back.

There is another "legal" issue, which is as follows:  Bankruptcy trustees are on the lookout for payments to unsecured creditors which exceed $600 per creditor in the 90 days before the case was filed (one year for 'insiders'-- basically, people who are relatives or close friends.)  The reason is that such a payment may be a "preference".  I usually say that there is nothing immoral, illegal or fattening about a preference, but the point from the trustee's standpoint is that he or she can recover the preferential payments and earn a commission for doing so.

So, you don't get the money back and the company you paid doesn't get to keep the money. Sort of a lose-lose proposition.

So, I think as a general matter, once you have decided that you have to file bankruptcy, stop paying the credit cards.

A related question is whether any of your credit cards will still be usable after your case is filed.  My thought is that you should expect your cards to be closed.  Many card companies subscribe to services such as AACER which every day access the bankruptcy court website to see if Social Security number such-and-such filed bankruptcy that day.  AACER then notifies the card company about that filing so that the card company can match that Social Security number to their account number.  Once they match your Social Security number to their account number, they can close your account.

As usual, there are exceptions to every rule;  be sure to ask about your specific question by calling me at 320-252-4473.

About "living wills"

 A while ago I came across a very short and simple "living will" published by the Twin Cities Medical Society.  "Living will" is an older term;  we call it "advance directive" or "health care directive" now.  

An advance directive is defined as:  Advance directives are legal documents that provide instructions for medical care and only go into effect if you cannot communicate your own wishes.

The Twin Cities Medical Society has now transferred its work on advance directives to a group called "Light the Legacy".  The address for that is https://www.lightthelegacy.org and you can download several versions of the advance directive at that site.  One of the versions is very simple:  You fill in your name, birth date, the name and relationship and phone number of the person you want to talk for yourself;  and then you sign the form and have your signature notarized or witnessed.  The form is literally one side of one sheet of paper, with instructions and suggestions on the back.  There are versions in English, Somali, Vietnamese, Chinese, Hmong, Russian and Spanish

The site includes a longer, eight-page version if you are willing to go into more detail about your wishes and hopes.

If you come to my office I will give you the short form -- free!  

I am also looking into a video version of a health care directive through an organization called Mideo.  Their website is:  https://mideohealth.com/ "Their website says:  MIDEO® is created via a facilitated medical evaluation with a licensed medical provider. From that evaluation a medical prescription for your care is created. It is then recorded and placed in our secure servers. We utilize ID cards called MIDEO ID cards and ask that they be kept with your insurance Cards and drivers license in your wallet or purse. You also receive a MIDEO Magnet for your refrigerator as we often train paramedics to look on the side of your refrigerator for your living will or advance directive."

There is apparently a cost, which may be covered by health insurance or Medicare.

I encourage you to at least have a paper short-form health care directive as part of your planning process.