Friday, January 15, 2016

Gambling Fever...in Bankruptcy Court

When a person files bankruptcy, all of his property is transferred into a theoretical pot known as the bankruptcy estate. The bankruptcy trustee can then sell items from the bankruptcy estate to pay back the creditors, subject to certain limitations and exemptions.

A 73-year-old man from Michigan recently filed bankruptcy. One of his assets at the time was his right to receive $1,000 per month for life pursuant to a Michigan Lotto "Cash for Life" jackpot that he won back in 1984. The cash payments for life became part of the bankruptcy estate and were subsequently auctioned by the trustee. The catch, however, is that as soon as the debtor dies, the payments will stop

How much would you pay to receive $1,000 per month for the rest of a 73-year-old bankruptcy debtor's life? The winning bid was $40,026. It's kind of ironic that gambling is probably what lead the old dude into bankruptcy to begin with, but then his creditors had to gamble in an attempt to get their money back. If he lives for another 20 years, the winning bidder will have hit the jackpot.

HERE is a link to a news article about the bankruptcy sale.

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