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Bankruptcy Law Blog

Monday, May 28, 2018

What WWE Co-Founder Linda McMahon Learned When She Went Bankrupt

Today, Linda McMahon and her husband Vince, are worth around $2 billion dollars. WWE, the business they built together after buying its fledgling predecessor from Vince’s father, is wildly successful. And Linda is currently serving as the leader of the federal Small Business Administration. But a few decades ago, the McMahon’s filed for personal bankruptcy. Linda recently went on the record with CNBC to talk about the bankruptcy and the important lessons she learned from it.

According to Linda, the McMahon’s accumulated over $1 million in debt when she was in her late 20s because she and her husband took investment advice from someone they trusted, and poured what money they had into a construction company and a cement block factory.

"We didn't really know the safeguards to really look for. We were relying on someone else whose opinion we respected at the time for those kinds of investments, and they just didn't work," says McMahon. "We partnered with some folks who weren't quite the business partners we expected them to be."

She regrets that she and Vince did not stick with what they knew and focus on growing their own business. As a result of their bad investments, the couple’s home was auctioned off and her car was repossessed in her driveway. All while the she was pregnant with their second child.

This is the same sort of financial strife that a lot of our clients are going through. And when that is happening, it can be easy to get down on yourself and think that you are a complete failure. But as Linda says, “it's really not how you fall, but it's how you get back up, and you just keep doing it.”

Filing for bankruptcy is what allowed the McMahon’s to get back up, and to ultimately build the WWE into the business it is today. And it is what helps thousands of families across the country get a similar fresh start each year. Because of this, bankruptcy is not something to be ashamed of. It is simply something to learn from and move on from.

At our firm, we help Alabama families file for both of the major types of personal bankruptcy — Chapter 7 and Chapter 13.

Chapter 7 is a traditional bankruptcy where assets are liquidated and the proceeds are used to pay off creditors. Most remaining debt is then forgiven. The debt that is not forgivable — mainly back taxes, unpaid child and spousal support, and student loan debt — may be renegotiated, putting the debtor in a position that is much more manageable.

Chapter 13 is sort of like a business reorganization but for people. Instead of selling off all assets, only some assets are sold off. The filer is put on to court-supervised debt repayment plan. At the end of the years-long process, a lot of debt will be paid off, some will be forgiven, and the remaining amounts will be something the debtor can eventually pay off on their own. It is more of a way to get in control of a bad financial situation than to get rid of it.

Under both chapters, the filer comes through much better off than they were before. To paraphrase Linda, it’s not about the fall, it’s about how you get back up and keep going.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”