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Thursday, December 9, 2010

Despite success on field, Michael Vick still faces massive debt

   Michael Vick(notes) paid his debt to society. Now he's trying to pay back his massive debt to creditors.Despite earning $4.1 million since signing with the Philadelphia Eagles, Vick lives on a shoestring budget set for him by a court-appointed trustee. Most of his salary goes toward paying back creditors Vick owed before entering federal prison. Those creditors, which include banks, former business colleagues and former endorsement partners, were protected because of Vick's 2008 filing for Chapter 11 bankruptcy. 
A 112-page, court-approved document serves as Vick's "reorganization plan." It was uncovered by ESPN legal analyst Lester Munson.
Among the facts Munson discovered in the plan:
• Two-thirds of every dollar Vick earns goes to creditors and taxes.
• The rest of the money is strictly controlled. Think of it as an allowance.
• Vick can spend $4,250 per month on rent and utilities and $472 per month on a car. His mother, who was on Vick's payroll during his headier, pre-prison days, can receive $2,500 per month.
• Other obligations Vick owes include mortgages, child support, fees for his agent (who gets $800,000 through 2015) and for his tax lawyers (who will eventually receive a total of $2.6 million). The allowance does allow for Vick to pay $1,355 per month for private school for the two children he has with his fiancee, Kijafa Frink. (Munson calls it a "rare bit of extravagance.")
• His creditors stand to receive $12 million through 2015, provided Vick continues to receive a multi-million dollar salary. Munson also writes that before Vick filed for bankruptcy, he frantically gave away $5 million to family and friends so that creditors couldn't get to it. The court-appointed trustee is trying to recover that money, which was given to Vick's friends, family and the mothers of Vick's children. This is being done via a lawsuit, meaning that the man in charge of Michael Vick's money is also suing Michael Vick's family. (Though Munson says a judge will likely rule in the trustee's favor, recovering the money will be a much more difficult matter.)
There have been countless reports about Vick's financial woes since he first got into legal trouble for running an illegal dogfighting ring, but Munson's story is the clearest picture yet of what Vick still has to go through. To watch a broadcast of Vick's games and hear announcers rave about his recovery, you'd think everything was behind him. This document says otherwise.
The more money Vick makes, the more money goes to creditors. A salary under $2.5 million would force Vick to pay 25 percent. That percentage jumps to 40 if Vick signs a deal worth $10 million or more per season.
This path to financial redemption follows the same road that led to Vick's personal reclamation. In both, he made stupid mistakes and then compounded them by being dishonest once authorities found out. After serving his time, though, he's dedicated himself to making up for his past misdeeds. It's not heroic, per se, but it's admirable. He could have run away like he does so often on the field. Instead, he appears to be trying to make it right.
It's ironic. Vick's success on the football field is what caused him to get in trouble in the first place. That same success is now helping him get out of it.

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