Creditors encouraged by Vick's deal

Michael Vick and the Eagles weren't alone in their excitement about the quarterback's hefty new contract.

Vick's creditors now have reason to expect that he will be able to repay more of the roughly $18 million outstanding in his bankruptcy case.

The committee overseeing the collection of Vick's debts believed early in the bankruptcy case that "the best thing that could happen to the creditors is for Michael Vick to restore his career," said Ross Reeves, an attorney for the trust collecting what Vick owes. "And he has, beyond anyone's expectation."

Under the terms of his agreement with creditors, Vick must dedicate a share of his earnings to paying back those to whom he owes money. The percentage he pays increases with his income, according to court documents.

Ten percent of his first $750,000 in annual earnings goes to creditors, for example, with the share increasing to 40 percent of any money earned over and above $10 million.

(The amounts are based on his "modified adjusted gross income," similar to taxable income.)

"A lot of things happened in my life. Whether things were done right or wrong, it doesn't matter anymore. I have an opportunity to move on with my life, and that's all I prayed for, and that opportunity has come," Vick said.

Vick spent lavishly, and sometimes wastefully, in his earlier days with the Atlanta Falcons. When federal dogfighting charges sent him to prison and cost him his contract, he couldn't meet his obligations and filed for bankruptcy in July 2008.

Exactly how much gets paid back will depend on how much of the new contract Vick plays out.

While on paper the deal is for six years and $100 million, only $35.5 million is guaranteed, and the final year is likely to be voided. It will be canceled if Vick plays 35 percent or more of the Eagles' snaps in any season, a near certainty.

"We have found in our legal work that NFL contracts are very complex financial documents," Reeves said.

Still, Vick's contract will pay him $20 million this season alone, according to multiple reports, and he has endorsement deals as well.

Vick owed roughly $20 million when he filed for bankruptcy. Through the end of June, he had set aside about $2.1 million for the trust collecting money on behalf of his creditors, according to court documents.

As part of his bankruptcy plan, Vick is restricted to a budget that limits him to about $300,000 of personal-living expenses. The budget is scheduled to be in place through 2015. But at the end of October, Vick can ask the court to remove the restrictions.

After paying taxes and his creditors, and setting money aside for his budgeted spending, Vick has been putting his remaining income into savings he can access later.