Warren Sapp Files For Chapter 7 Bankruptcy
Former NFL star Warren Sapp recently filed for Chapter 7 Bankruptcy in the Southern District of Florida. Although Sapp’s Chapter 7 filing will no doubt be more complicated than most Chapter 7 cases, it is still governed by the same underlying rules and laws. The basic premise of Chapter 7 is that a debtor turns over his non-exempt assets to a trustee who then liquidates the assets and uses the proceeds to pay the debtor’s creditors. The debtor then receives a discharge of most if not all of his debt. In most of the Chapter 7 cases that our firm files, the debtor is able to exempt all or close to all of his assets. In cases where we can’t exempt all of the debtor’s assets, the debtor is usually able to “buy-back” his non-exempt assets from the trustee.
Warren Sapp’s bankruptcy is obviously much different than the typical Chapter 7 case. Sapp still has significant assets and still generates a huge monthly income. His bankruptcy schedules list his monthly income at over $115,000 per month and his monthly expenses are close to this amount. Normally there is a Means-Test in order to qualify for Chapter 7. However, since the majority of Sapp’s debt is non-consumer and primarily business debt, he was still able to qualify for Chapter 7.
Sapp also looks to be able to exempt a significant amount of his assets as well. His NFL 401k and pension should be fully exempt under Florida law. His primary residence and most if not all of his other retirement accounts are also exempt. Sapp’s furniture, bank accounts, and jewelry are non-exempt and would need to be either surrendered or repurchased from the Trustee. Interestingly, Sapp claims that he lost his Super Bowl and National Championship rings. As these rings would now be property of the bankruptcy estate, Sapp would face significant penalties if it is proven that he lied about losing these rings.
Most of Sapp’s debt will be discharged among completion of his petition. The most notable exception is child support and alimony. Sapp owes a significant amount of child support and alimony; none of which will be dischargeable in bankruptcy.
Jonathan Bierfeld is an attorney with Martin Law Firm, P.L., whose practice focuses in Bankruptcy Law and Civil Litigation. He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida. He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.