Bankruptcy does not discriminate. It doesn’t care if where you come from, what your occupation is or how much money you have in the bank. Most people assume bankruptcy is associated with people who are careless with their spending. However, bankruptcy happens for a myriad of reasons. For celebrities, there are many reasons why they file for bankruptcy, including debt, canceled contracts, costly divorces, delinquent on taxes and failed businesses.
Declaring Bankruptcy Due to Debt
Just because you’re famous does not give you a free pass to spend without care – and not pay your taxes. The celebrities below declared bankruptcy for a number of reasons.
- 50 Cent – The rapper filed for bankruptcy in 2015, days after being ordered to settle a lawsuit for 5 million dollars.
- Gary Busey – According to Reuters, the actor filed for bankruptcy in 2012 due to debts between $500,000 to $1 million.
- Toni Braxton – Sometimes it seems you can’t catch a break. The singer filed for bankruptcy twice. The first time in 1998 due to low royalties and the second time in 2010 for canceling her Vegas show due to illness.
- Burt Reynolds – We all know divorce can be ugly. In Reynolds case, his divorce from Loni Anderson in 1993 put him $10 million into debt. He filed for bankruptcy in 1996.
- MC Hammer – The “Can’t Touch This” singer spent an enormous amount of money on his entourage, not to mention he was delinquent on his taxes. Hammer filed for bankruptcy in 1996.
- Drake Bell – The Nickelodeon star spent more than he earned – $18,771 per month. As a result, created a $581,000 debt; the only solution was bankruptcy.
Filing Due to A Failed Business
Declaring bankruptcy is a common business practice, especially if you want to keep your business in operation. Despite filing for bankruptcy, these business owners didn’t give up and went on to have better financial futures.
- Walt Disney – The creator of Mickey Mouse filed for bankruptcy in 1921 because his company Laugh-O-Gram Studio failed. It’s a good thing Disney didn’t give up his animation dreams.
- Stan Lee – The comic book legend filed for bankruptcy in 2000 due to the failure of Stan Lee Media Company. To protect his comic book characters, he put them under a new company called POW! Entertainment. Lee is now in the black due to the movies based on his comic book heroes and villains.
- Donald Trump – Before he was president, Trump was a ruthless businessman. He declared bankruptcy due to failed ventures in 1991, 1992, 2004 and 2009. It’s important to note that none of the bankruptcies were Chapter 7.
Bankruptcy: A Turning Point
Some of the bankruptcies above could have been prevented. Regardless, the only logical solution was to declare bankruptcy, whether it was a Chapter 7, 11 or 13. These celebrities did not let their bankruptcies keep them down. They bounced back financially and or physically (changed their lifestyles).
The same can happen to you with the right bankruptcy attorney. A bankruptcy lawyer knows which type of filing is right for your situation. Before you decide on an attorney, we suggest you go over all of your expenses and debts, so that you can see your financial status.
At Cibik & Cataldo, we offer a free consultation to help you understand bankruptcy, including the civil court. Contact us today to schedule your appointment!