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Star hockey player files for bankruptcy

The Columbus Blue Jackets’ star defenseman and assistant captain, Jack Johnson, filed for Chapter 11 bankruptcy last month.  Unlike many professional athletes who have filed for bankruptcy, his story is not one of irresponsible behavior and reckless overspending, at least not on his part.

Johnson entrusted his parents to handle his finances as he felt he was too young and inexperienced to do so when he entered the National Hockey League.  His parents violated that trust by purchasing vehicles, doing expensive home improvements and taking out high-interest loans, some of which were secured by his future earnings, without his knowledge.   When his parents couldn't make the payments on the loans and the debt collectors started to call, they told Johnson not to worry about it and to just concentrate on his hockey career.

While Johnson’s case is an extreme one, I see a few parallels between his situation and that of many of my clients.  Here are some important lessons that can be learned from Johnson’s misfortune:

  • Avoid payday loans. When you are in a bind and need cash quick, payday loans can seem like the perfect solution.  The company gives you cash on the spot in exchange for getting to take a certain amount of money out of your bank account each time you get paid over the next few months.  The problem is that the amount of money they take from your account often leaves you unable to cover your expenses and requires you to take out another payday loan.  You can see how this can become an almost impossible cycle to break.  Also, the interest is extremely high.  You will end up paying back four or five times the amount you originally borrowed.  Johnson’s parents took out a $1.56 million dollar payday loan at 12% interest and the first payment alone was $1 million!  Johnson’s parents were unable to make the first payment and the loan went into default.
  • Don’t overextend yourself to help friends and family. I have had a lot of clients over the years who have gotten into financial trouble by helping loved ones.  Sometimes my clients give money to their loved ones, which leaves them short of cash and needing to rely on credit to make ends meet.  Other times, my clients co-sign a loan for a loved one or allow a loved one to use their credit card.  When the loved one is unable to make the payment, my client is the one on the hook.  If you have money left over at the end of the month after you pay all of your expenses and set aside money for emergencies, it is fine to give a reasonable amount of money to friends and family that need it.  Never go into debt to help out friends and family and just assume that you’re never going to get paid back.
  • Always know what is going on with your finances. It is very common among my married clients to have one spouse handle all of the finances and the other spouse is totally clueless.  While this is usually done for convenience purposes, it can be very harmful if the spouse that handles the finances is no longer able to do so or if the financial situation deteriorates.  It is heartbreaking when I meet with a newly-widowed client whose husband always handled the finances.  In addition to being grief-stricken, she is also at a total loss as to what is going on with her finances and how to handle them.  I have also met with people who have tried to hide the worsening state of their finances from their spouse.  Sometimes this is out of fear as to how their spouse will react and sometimes it is to save the spouse from stress.  Either way, the further out of control the situation gets, the harder it is to reveal to your spouse.  If Johnson would have retained some control of his finances or at least reviewed his financial situation periodically, things never would have gotten as bad as they did.  If you choose to entrust the day-to-day financial duties to someone else, at least set up quarterly reviews of your accounts with your spouse and keep an open dialogue about money.


Jack Johnson is a perfect example of the fact that everyone makes mistakes and anyone, no matter how much they make, can find themselves in a bad financial situation.  Hopefully Johnson will learn from his mistakes and you can too.  However, if you already find yourself in financial trouble, give Steidl & Steinberg a call.  We have 30 years of experience helping people resolve their debts.  As Johnson’s experience shows, filing a bankruptcy can be a great way of getting your debt under control and building a better financial future.



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