Celebrity Bankruptcies

Bankruptcy, Borrowing

Celebrities and money management don’t always go together well. From the entertainment field to athletes to reality TV stars, celebrities arrive at their wealth and fame armed with a spectrum of spending habits and financial skills. Some inherently know how to handle their finances, and others hire trusted people to manage their funds for them. Those who don’t — and those who are hit with lawsuits and other circumstances because of their celebrity status — can end up losing it all and heading to bankruptcy court.

Here are a few celebrities who have been forced to file for bankruptcy over the years. Some are fairly predictable; others are surprising.

  • Nicolas Cage – The highly bankable star (pictured above) makes around $40 million a year, yet still managed to rack up enough debt to declare bankruptcy.
  • Jose Canseco – The former Oakland A’s outfielder who is synonymous with performance-enhancing drugs declared bankruptcy with approximately $1.7 million in debt.
  • Meat Loaf – The gregarious singer/songwriter and actor known as Eddie in the campy Rocky Horror Picture Show and for his hit song Paradise By the Dashboard Light declared bankruptcy in the mid-80s amid a dispute with former songwriting partner Jim Steinman.
  • Kim Basinger – After backing out of a movie deal in 1993 and being sued as a result, Basinger declared bankruptcy once the lawsuit with Main Line Pictures was settled.
  • Kelly Rutherford – The Gossip Girl and Melrose Place star declared bankruptcy due to mounting legal bills from a messy divorce and child custody proceedings.
  • Wayne Newton – Bad investments took Newton from being the highest paid entertainer according to the Guinness Book of World Records (1983) to Chapter 11 bankruptcy in 1992.
  • Aaron Carter – The singer, reality-TV star, and kid brother of Nick Carter of the Backstreet Boys declared Chapter 7 bankruptcy with $3.5 million in liabilities. Carter reportedly listed his dog as an asset. Nice try.
  • Warren Sapp – The former NFL defensive lineman and sports commentator was forced to file for bankruptcy in 2012, with $6.7 million in liabilities. Sapp did have assets of $6.45 million, including $6,500 in Air Jordans (not the most liquid of assets).
  • Toni Braxton – Braxton has already filed for bankruptcy twice, in 2010 and 2013. Since the last bankruptcy, she purchased a $3 million home in California. Maybe the third time’s the charm?
  • Sinbad – Another two-time visitor to the bankruptcy court, the comedian and actor filed for bankruptcy in 2009 and in 2011. The issue during the second bankruptcy had more to do with tax disputes than with poor spending habits — of the $11 million in liabilities, $8 million was in back taxes owed.
  • Janice Dickinson – The former Price is Right model and reality TV star filed for bankruptcy in 2013 with over $1 million in accumulated debt.
  • Larry King – In 1978, just prior to acquiring his long running show, the iconic host declared bankruptcy after a dispute with a former business partner.
  • MC Hammer – Perhaps his hit song Can’t Touch This should have been renamed “Can’t Afford This.” Despite his iconic hit song and video (and equally iconic pants), Hammer racked up $13 million in debt through his free spending lifestyle and large entourage. In 1996, Hammer eventually filed for bankruptcy.
  • Burt Reynolds – Smokey went bankrupt? Indeed, he did, also in 1996. Bad investments and a messy divorce with WKRP in Cincinnati star Loni Anderson forced Reynolds to file for Chapter 11 bankruptcy.

Unfortunately, this list is sure to grow over the years. They may lead more glamorous lives than we do, but celebrities run a greater risk of having it all come crashing down.

Photo ©iStock.com/EdStock

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