Stardom is about being rich and famous no doubt, but it is susceptible to pitfalls associated with money. The celebrity gossip magazines are rife with anecdotes of how celebrities go bust periodically, and don’t have enough to buy a sandwich even from a vending machine! If you are a star then these kinds of incidents are frightening and unnerving. There are those who come out of their monetary problems and become more successful but a majority just reaches a stage where they see no other way but to file for bankruptcy.
Types of bankruptcy
The most common types of bankruptcy filed by an individual – a common man or a star are the:
- Chapter 7 Bankruptcy
- Chapter 11 Bankruptcy.
You file for this bankruptcy when you are completely broke and the only solution to recover money is by liquidating all your assets and paying back the creditors. In this stage all your personal belongings will go and you will be left with nothing.
Also known as rehabilitation bankruptcy in this type of bankruptcy you are given a time frame to repay all the debt. A trustee is appointed to oversea the recovery.
Many celebrities file for chapter 11 because they are a brand by themselves and this will help them bring in funds to clear the debts.
A less common type, the chapter 13 is filed when you are still earning a regular income and can pay your debts. Since most celebrities’ generate income from concerts and endorsements they are in a position to repay their debts within a span of three to five years.
Right from our present President Donald Trump to the great Mike Tyson, several celebrities have filed for bankruptcy during their reign at the helm of popularity. Listed below are five such celebrities who threw the towel and declared bankruptcy.
- Janice Dickinson
The blunt and sharp speaking judge of the popular show “America’s Next top Model,” is the self-proclaimed first supermodel in the modeling industry. In 2013, this former model filed for bankruptcy stating that she was over million dollars in debt; half of this sum she owed the government and the balance to an anti-aging centre and a reputed dermatologist.
- Warren Sapp
Almost 78% of NFL players file for bankruptcy once they retire; Warren Sapp whose name is enshrined in the NFL hall of fame is one such player who filed for bankruptcy in 2012. His debts ran into $6.7 million while his assets didn’t match up. He filed for a Chapter 7 bankruptcy wherein he even had to sell his personal collection of Nikes, TVs, computers, furs and several memorabilia collected over the years.
- 50 Cent
Rapper Curtis Jackson better known as 50 Cent shot to fame with his debut album, “Get Rich or die Trying.” He did get rich but didn’t die trying, however, he did go bankrupt in 2015. He filed for chapter 11 bankruptcy unlike the rest who file chapter 7. His team might have a reorganizational plan to repay all his debts and hence have chosen this type. He claimed that he had debts over 36 million while his assets amounted to only 20 million.
4. Gary Busey
The renowned eccentric actor famous for his role in the movie, “Lethal Weapon” is one more star from Hollywood who filed a chapter 7 bankruptcy in 2012. He is reported to have debts over $ 500,000 with assets worth only $ 50,000 or even less.
5. Aaron Carter
The American singer and teen sensation has several famous music albums to his credit with “Aaron’s Party (Come Get It),” selling over three million copies. All the fame didn’t stop Aaron from declaring bankruptcy in 2013; he filed for a chapter 7 bankruptcy stating his liabilities are over $ 2 million while his assets are a mere $ 8232. Government taxes comprise the maximum debts in his list. By 2014 Carter, however, settled all his tax debts and is on the road to recovery with solo releases and other shows.
Bankruptcy is not the end
Bankruptcy amongst celebrities is often a result of lavish spending, failure to pay taxes and poor investment decisions. According to http://mydebtadvisors.com/milwaukee-wi-office-locations bankruptcy attorneys in Milwaukee, WI, bankruptcy is like a wake-up call wherein a celebrity can take time off and find solution to the financial quagmire.
Bankruptcy doesn’t hurt celebrities the way it does to common people; they are special. They have access to better deals when compared with the masses because they can always generate funds because they are a brand.
These big names know the skill to make money and have the right contacts that will back them up because they are a brand recognized by the masses. They can bounce back more successful than before.