Hockey Player With Multi-Million-Dollar Contract Files for Bankruptcy

A 27-year-old professional hockey player declared bankruptcy Oct. 7, despite having earned $18 million in nine seasons in the NHL and $5 million on the way for his current season with the Columbus Blue Jackets. Nearly all of Jack Johnson’s money is gone, the Columbus Dispatch reports, and it’s a sad but not uncommon story showing how destructive debt and poor financial decisions can be, no matter how much money you have.

Johnson’s path to bankruptcy reportedly includes defaulting on risky loans taken out at high interest rates, in addition to three lawsuits against him (two have been settled, one is pending), and it all apparently stems from a mountain of bad financial advice.

“I’d say I picked the wrong people who led me down the wrong path,” Johnson told the Dispatch. “I’ve got people in place who are going to fix everything now. It’s something I should have done a long time ago.”

Aaron Portzline of the Dispatch has been investigating the story for months, and some of his sources, who went unnamed, said those “wrong people” included his parents. They reportedly borrowed as many as 18 high-interest loans in his name. Borrowing against guaranteed future earnings, or “monetizing,” is a common source of financial problems for athletes, Portzline writes.

While the story involves a professional athlete and millions of dollars, it’s comparable to a lot of tales of financial disaster suffered by average Americans without multi-million-dollar paychecks. It depicts a young person with little financial knowledge entrusting his future to those closest to him, and that’s the all-too-familiar plot line for many consumers, whether it’s falling victim to predatory lending, taking out too many loans for college, letting someone abuse your credit card or co-signing a doomed loan. Emotionally, it’s hurtful and messy, and financially, it can feel hopeless.

It isn’t. That doesn’t mean it won’t be hard — recovering from bankruptcy takes years and severely damages your credit, but sometimes it’s the best way forward. If you’re not at that point, you may still have options for paying down debt, but carefully seek advice if you’re not sure what choice is best for you.