Olympic Bankruptcies for Ordinary Families
By HELAINE OLEN
“I’m not even embarrassed.”
With that forthright acknowledgement of her financially precarious state when asked by reporters about her recent bankruptcy filing, Natalie Hawkins, the mother of the Olympic gold medal winner Gabby Douglas, might have done as much for people suffering from the economic tsunami of the last several years as her daughter has accomplished for the sport of gymnastics.
Ms. Hawkins, who said she filed for bankruptcy to protect her ownership of her Virginia home, is not the only parent of a star Olympian in severe financial straits. The mother and father of the swimmer Ryan Lochte are also in arrears. They ceased paying the mortgage on their Florida home in 2011, and are now being sued by the banking company that holds their loan.
While a few personal finance reporters have rushed in to point out that training a child for the Olympics is quite expensive, those expenditures are unlikely to be the cause of either family’s money woes. Ms. Hawkins’s bankruptcy filing revealed the single mother was raising her family of four children on about $30,000 annually, most of which came from Social Security medical disability benefits and child support payments from her soon-to-be ex-husband. You probably don’t need me to tell you that this amount of money is not going to go far in supporting a household full of children, even without gymnastics lessons. Not surprisingly, there is no evidence of licentious living, unless you count a $408 orthodontia bill for the future gymnastics star as a luxury item.
If anything, it is likely other mothers and fathers of Olympians are in similar circumstances as Ms. Hawkins and the Lochtes, and we just don’t know it. According to the Federal Reserve, the median household net worth fell by 40 percent from 2007 to 2010. For African-American families, like Ms. Hawkins’s, the numbers were far worse, with CNNMoney, which performed an extensive analysis, asserting those families lost 60 percent of their total net worth during the same period.
There is much personal pain behind those rather dry sounding statistics. According to research, the biggest predictor of bankruptcy is not overspending, but medical woes and unemployment, two factors clearly present in the Hawkins/Douglas household. At least one was also a factor in the Lochte situation. “I just got divorced and I had lost my job,” Ileana Lochte told USA Today, by way of explaining her financial distress. And if you are wondering, research performed by Elizabeth Warren several years ago revealed divorced single mothers have a much higher risk of bankruptcy than anyone else.
Yet despite years of living through the worst economic downturn since the Great Depression, the vast majority of us remain reluctant to acknowledge our financial struggles publicly. The shame is immense. The revelations of economic trouble in the households of these star athletes is an “Olympic parents — they’re just like us!” moment. Bankruptcy hits everywhere, and for many reasons. Often that shame is misplaced. Americans, perhaps more so than other cultures, tend to believe all fiscal failure is their own fault.
Almost nothing seems capable of shaking this belief. Not the recent revelation that just under half of Americans die with nothing in the way of assets and not the fact that the majority of Americans approaching the end of their working days have less than $30,000 in their retirement accounts. Perhaps, as the real impact of the last decade becomes unavoidable for more families, we will at least begin to talk about it.
With that forthright acknowledgement of her financially precarious state when asked by reporters about her recent bankruptcy filing, Natalie Hawkins, the mother of the Olympic gold medal winner Gabby Douglas, might have done as much for people suffering from the economic tsunami of the last several years as her daughter has accomplished for the sport of gymnastics.
Ms. Hawkins, who said she filed for bankruptcy to protect her ownership of her Virginia home, is not the only parent of a star Olympian in severe financial straits. The mother and father of the swimmer Ryan Lochte are also in arrears. They ceased paying the mortgage on their Florida home in 2011, and are now being sued by the banking company that holds their loan.
While a few personal finance reporters have rushed in to point out that training a child for the Olympics is quite expensive, those expenditures are unlikely to be the cause of either family’s money woes. Ms. Hawkins’s bankruptcy filing revealed the single mother was raising her family of four children on about $30,000 annually, most of which came from Social Security medical disability benefits and child support payments from her soon-to-be ex-husband. You probably don’t need me to tell you that this amount of money is not going to go far in supporting a household full of children, even without gymnastics lessons. Not surprisingly, there is no evidence of licentious living, unless you count a $408 orthodontia bill for the future gymnastics star as a luxury item.
If anything, it is likely other mothers and fathers of Olympians are in similar circumstances as Ms. Hawkins and the Lochtes, and we just don’t know it. According to the Federal Reserve, the median household net worth fell by 40 percent from 2007 to 2010. For African-American families, like Ms. Hawkins’s, the numbers were far worse, with CNNMoney, which performed an extensive analysis, asserting those families lost 60 percent of their total net worth during the same period.
There is much personal pain behind those rather dry sounding statistics. According to research, the biggest predictor of bankruptcy is not overspending, but medical woes and unemployment, two factors clearly present in the Hawkins/Douglas household. At least one was also a factor in the Lochte situation. “I just got divorced and I had lost my job,” Ileana Lochte told USA Today, by way of explaining her financial distress. And if you are wondering, research performed by Elizabeth Warren several years ago revealed divorced single mothers have a much higher risk of bankruptcy than anyone else.
Yet despite years of living through the worst economic downturn since the Great Depression, the vast majority of us remain reluctant to acknowledge our financial struggles publicly. The shame is immense. The revelations of economic trouble in the households of these star athletes is an “Olympic parents — they’re just like us!” moment. Bankruptcy hits everywhere, and for many reasons. Often that shame is misplaced. Americans, perhaps more so than other cultures, tend to believe all fiscal failure is their own fault.
Almost nothing seems capable of shaking this belief. Not the recent revelation that just under half of Americans die with nothing in the way of assets and not the fact that the majority of Americans approaching the end of their working days have less than $30,000 in their retirement accounts. Perhaps, as the real impact of the last decade becomes unavoidable for more families, we will at least begin to talk about it.
Helaine Olen’s book “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” will be published by Penguin’s Portfolio imprint in
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