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Former coach in hot water with court for Chapter 7 claim

In the never-ending saga that seems to have enveloped the life of former Arkansas Razorbacks football coach John L. Smith, the former coach is now facing accusations that he attempted to defraud several of his creditors. In fact, various creditors filed multiple complaints against the coach in just the last few weeks. Tennessee readers may recall that Coach Smith filed for Chapter 7 bankruptcy last year, claiming approximately $40 million in liabilities.

The coach's financial challenges, which received press on numerous occasions, stem from a number of bad real estate deals that the coach made near Louisville. In order to start over, the coach sought Chapter 7 bankruptcy relief hoping that his debt would finally be discharged. Unfortunately, some of the former coach's creditors are trying to prevent him from getting the relief that he seeks, and investigators are now looking into the coach's finances.

The complaints allege that Coach Smith abused the bankruptcy system by committing acts intended to defraud the court as well as his creditors. The basis for the complaints relate to an unusual contract that the Mr. Smith entered into with the Razorbacks. Creditors claim that the contract was structured to delay the coach's pay until after he filed for bankruptcy because the bankruptcy estate would control only those assets acquired before the date of filing.

In most cases, the process of filing for Chapter 7 bankruptcy is much less than it has been for Coach Smith. In fact, individuals who file for debt relief through Chapter 7 bankruptcy are often surprised to learn how straightforward the bankruptcy process can actually be. Those filing for bankruptcy may consider speaking with a professional to better understand the bankruptcy process and learn about their options.

Source: USA Today, "Creditors allege fraud by former Arkansas coach Smith," Brent Schrotenboer, Feb. 12, 2013

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