It might be difficult for those of us living paycheck to paycheck to understand but people in all kinds of financial situations could possibly be in money trouble. That includes pro athletes who have been paid lots of money over their respective careers. That’s the case for Detroit Lions running back Adrian Peterson who has to pay back a lot of money on a defaulted loan.
According to The Athletic, a New York state judge ruled that Peterson must pay DeAngelo Vehicle Services, a lender out of Pennsylvania, $8.3 million on a loan that was defaulted. Peterson didn’t send council to the hearing, where the judge to rule in favor of the lender, who had filed the lawsuit two and a half years ago.
Peterson’s path for how he got into money trouble is one of many warnings for pro athletes to learn how easy it can be to be in this position. Peterson is currently in arbitration against Morgan Stanley due to bad investments and this defaulted loan was believed to have been used to pay back other loans that were a result from those bad investments.
A big problem with taking out a massive loan like this, especially one to pay back other loans, is the interest rate and that’s been adding up the past few years. Peterson’s original loan, taken out in 2016, was for $5.2 million and has now reached just slightly less than $8.3 million considering a 16 percent interest rate/late fees. Right now, a little over $2,200 is added on the loan each day though New York state law will cut the interest rate from 16 percent to 9 percent.
It’s unknown what Peterson’s next move will be but if he can’t pay back the loan, bankruptcy might be the endgame. Many people will be playing the world’s smallest violin for someone who despite being paid millions is in money trouble, and that’s fair. And obviously, if Peterson took out the loan, he should pay it back. Either way, it’s another cautionary tale when pro athletes have a lot of money and go down a bad road in the investment game.