Months after winning $1 million on a game show, Georgia’s state superintendent of schools and her husband reportedly filed Chapter 7 bankruptcy.

However, this isn’t a story of why they filed; it's a story about what happened afterward.

In fact, according to the Atlanta Journal-Constitution, Superintendent Kathy Cox was selected to appear on Fox’s “Are You Smarter than a Fifth Grader?” partly because she wanted to play to win money for Georgia schools.

Unfortunately, getting her prize money to the children of Atlanta hasn’t been as easy as she hoped.

Background: She Wanted to Spend Winning on the Blind & Deaf

Sources indicate that Cox planned to donate her TV winnings to three state-run schools for children with vision and hearing impairment.

And, as the first person ever to win the top prize of one million dollars on “Fifth Grader,” it looked like the schools would be receiving some cash.

The Filing Bankruptcy Twist

But, three months after her winning, Cox’s husband filed for Chapter 7 bankruptcy protection, largely because of debt his construction company accrued.

In a Chapter 7 bankruptcy:

• A filer’s non-exempt assets can be liquidated. The money raised from the liquidation sale is then distributed among the filer’s creditors to cover debts.
• The trustee determines how to distribute funds. A bankruptcy trustee, who is a federal employee, makes decisions about how much money goes to which creditors.

In the Coxes’ situation, their trustee has reportedly sued the Coxes and Fox Broadcasting Corporation in an attempt to get the prize money paid to the Coxes’ creditors rather than the schools.

Indeed, most state bankruptcy laws consider cash above a certain amount to be a non-exempt asset and therefore destined for the filer’s creditors.

Naturally, a protest has been scheduled and people on both sides of the debate are fervently determined to fight for their cause.

The Underlying Issues

Part of the reason for the hullabaloo and confusion is that the various parties can’t agree about whether Cox participated in the game show as a representative of the state schools or as an individual.

The check she received from Fox was allegedly made out to her, which complicates matters.

Ultimately, the judge who presides over the court case between the two parties will have to decide whether the money Cox earned on the show is legally hers or the state’s.

Learn more about filing bankruptcy.

Tags: bankruptcy filing, bankruptcy laws, chapter 7 bankruptcy, filing bankruptcy, game show