Fresh of the news about Lenny Dykstra's plea in regards to bankruptcy fraud and Curt Schillng's company filing for Chapter 11 bankruptcy protection, another former baseball player is seeking protection from creditors by filing for bankruptcy. Jose Canseco filed a Chapter 7 (liquidated) bankruptcy petition yesterday. The 48 year old Canseco was the 1986 American League rookie of the year and 1988 league MVP with the A's and currently plays for the minor league Worcester Tornadoes in Massachusetts.
Even though Canseco works in Massachusetts, he currently lives in Las Vegas, Nevada. Thus he filed the petition in the U.S. Bankruptcy Court, District of Nevada, located in Las Vegas.
Canseco states that his assets are worth less than $21,000 and that he owes almost $1.7 million to creditors. His largest creditor is the Internal Revenue Service, which he owes more than $500,000 to. In addition to the IRS, Canseco owes money on a number of judgments and has multiple accounts in collection.
It is a common misconception that tax liability cannot be discharged through bankruptcy proceedings. It is true that some tax debt is not dischargeable, there a many instances where tax debt is dischargeable.
A good bankruptcy lawyer will work with the client to ensure that they discharge as much debt as possible, including tax liability. Sometimes it can be as simple as delaying the filing for a few months. Other times, however, it can be more complicated.