Jose Canseco Files Chapter 7 Bankruptcy Petition

Written by: Robert DeMarco
Jose Canseco, former Major League Baseball outfielder and designated hitter, is probably best know for his record setting season in 1988 when he hit 42 home runs and stole 40 bases.   He also achieved a great deal of notoriety after publishing his tell-all book, Juiced: Wild Times, Rampant ‘Roids, Smash Hits & How Baseball Got Big, in which he claimed that the vast majority of MLB players use steroids.
Between 1989 and 2000 Canseco grossed over $44,000,000.00 from playing baseball – exclusive of endorsements.  Despite such financial success and notoriety (good and bad), he filed a chapter 7 bankruptcy petition on July 31, 2012.  As with many athletes and celebrities, Canseco had substantial tax obligations – approximately $500,000.00 to the Internal Revenue Service and approximately $150,000.00 to the California Franchise Tax Board.  Canseco also lists unsecured debts owed to Citibank [$116,026.00] and Christian Presley [$785,344.00].  The Christian Presley obligation stems from a judgment issued by a Florida trial court in 2001 based on injuries that Presley sustained in a fight with Canseco and his brother in a Miami nightclub.
The sad part of this tale is that his bankruptcy schedules make clear that, despite having earned over $40 million over a ten year period, Canseco owned next to nothing.  To add insult to injury, most of the meager possessions he did own were subject to an IRS tax lien.
Regardless of how he got here, the question is whether or not Canseco will be able to discharge his debts, including the Presley judgment.  First, and foremost, the fact that the Presley debt is a judgment does not, in and of itself, affect the dischargeability of the obligation.  Judgments are discharged by Bankruptcy Courts everyday.
Dischargeability is a highly factual issue.  The Bankruptcy Code provides that a debtor cannot discharge debts “for willful and malicious injury by the debtor to another entity or to the property of another entity.” Such relief is not, however, automatic.  A creditor (the injured person or entity to whom the debt is owed) must file a complaint against the debtor claiming that the debt should not be discharged.  While such complaints are often commenced in the Bankruptcy Court (an adversary proceeding), State Courts also have jurisdiction to hear such matters.
In the case of judgment arising out of a bar fight, the debt may or may not be dischargeable.  First, the plaintiff must file a complaint objecting to the discharge of the debt within sixty days of the date first set for the meeting of creditors.  Second, the plaintiff must establish that such debt stems from a “willful and malicious injury.” In the case of Canseco, his attorney agreed to an open ended extension of the deadline to file such a complaint.  As of the date of this post, Presley has not filed a complaint objecting to the discharge of his judgment against Canseco.
If you have been sued or worse, have a judgment entered against you, bankruptcy is still a viable option, and the lawyers at DeMarco•Mitchell, PLLC, are here for you. Feel free to call or email us for a free initial consultation to discuss your financial condition and how we can help.
DATED:  May 31, 2013