HOLLYWOOD—We all think that the lives of the rich and famous seem so glamorous, but even celebrities suffer with money-management problems. Despite many rags-to-riches stories, financial hardship could hit just about anyone from celebrities to your next door neighbor. From musicians to athletes to A-list celebrities, fame and wealth results in a disastrous spending spree.
Believe it or not, many celebrities have ended up declaring bankruptcy. The three most common types of bankruptcy are Chapter 7, the traditional liquidation, or straight bankruptcy, where you list all the debtors assets for the benefit of the creditors. The second most common is Chapter 13, where you reorganize. Usually people file Chapter 13, when they have assets, such as a house and car. A plan is formulated which provides monthly payments to creditors over a term of three to five years. If a person is behind mortgage payments, Chapter 13 allows the debtor to pay the arrearage over a three-five year period. Lastly, Chapter 11, is a complicated financial reorganization typically used by major businesses.
Let’s look at some celebrities that unfortunately hit the downward spiral: The late Michael Jackson, the King of Pop was supposedly $400 million in debt when he died unexpectedly in 2009. He was also close to foreclosure on his famous Neverland home. His money woes got worse when he was involved in numerous lawsuits. Before he died, Jackson had planned on getting out of debt by touring. His estate resolved the financial issues, and Michael has been the top-earning dead celebrity for five straight years.
Nicolas Cage, back in the day was earning millions, however, he never read “The Millionaire Next Door,” he was a big spender. He purchased homes, cars and rare artifacts. The IRS placed tax liens on multiple properties he owned, and had Cage hand over more than $6 million for failing to pay his 2007 tax bill. Cage’s financial woes led him to see many of his belongings, including a treasured comic book, and take many film roles.
Alec Baldwin’s younger brother Stephen Baldwin filed for bankruptcy back in 2009, while owing money on taxes and a couple of mortgages. Baldwin’s house was foreclosed in 2017 after six years of no mortgage payments. On another occasion, according to published reports, Baldwin was arrested and served five years’ probation for failing to pay taxes for three straight years.
His ex sister-in-law, Kim Basinger back in 1989, paid $20 million for a 1,691- acre town. Basinger was expected to do a tourist attraction such as a theme park or movie studio in Braselton, Georgia, but instead she declared bankruptcy and had to sell for a huge loss. Basinger settled with Main Line Pictures, avoiding the initial $8.1 million judgement for violating her contract and dropping out of performing in the 1995 film, “Boxing Helena.” Back in the 90s, she was spending $30,000 a month on clothes, pets, etc. Another one, who didn’t read about money-management.
Everyone remembers 50 Cent, broke as a rapper, yet a savvy businessman with a diverse business empire. His first trouble began during the 2008 recession when his stocks took a dive. In 2015, 50 Cent was $32.5 million in debt while caught up in lawsuits and unpaid child support payments. He declared bankruptcy the following year. As luck would have it, he received 700 Bitcoins as payment for a 2014 album and his share of cryptocurrency came to be millions. Especially if he sold it back in November and December 2017. It topped out at $20,000 for one Bitcoin.
The late Burt Reynolds, also had his share of money woes. He had a string of failed investments. After an expensive marriage to Loni Anderson, Reynolds experienced a costly divorce. He declared bankruptcy back in the 90s, while he was $11.2 million in debt. Willie Nelson has seen his share of money woes, his fans came to the rescue organizing fundraisers and he was forced to record “The IRS Tapes: Who’ll By My Memories.”
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