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Risk taking athletes more likely to declare bankruptcy

Arizona residents facing monetary problems and struggling to make ends meet on a daily basis may be surprised to hear that athletes earning millions of dollars face financial problems as well. In fact, according to a Sports Illustrated story in 2009, within a few years of retiring, around 60 percent of professional basketball players either faced bankruptcy or serious financial hardship.

Arizona residents may be wondering how this is possible, since they earn such high salaries. Or they may attribute it to the flashy lifestyle they see athletes living, with the expensive sports cars and multiple high end houses they buy. However, more often than not, they face financial problems for the same reason an average person would; they took a risk that didn't pan out. In fact, a labor economist contends that players who play a more risky style on the court are more likely to take entrepreneurial risks off the court, and unfortunately, the riskier the business, the more likely it is to go bankrupt.

This may be something debtors are familiar with-taking a financial risk that they thought would pay out in the future only to be staggered when it doesn't. However, just as the sports leagues are increasingly placing stress on financial education and other programs aimed at improving athletes' financial literacy, Arizona residents should also consider educating themselves about their financial situation and businesses before risking everything in them.

When financial woes become too much to handle alone, the federal guarantee of protection in the form of bankruptcy is an option debtors can avail themselves of to wipe out their debts and pay off creditors as much as possible.

Source: For more information about bankruptcy and foreclosure, visit our webpage.