19 Most Famous Celebrities Who Went Bankrupt

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It is no longer news that famous celebrities can go bankrupt too. But who are the most famous celebrities who went bankrupt?

Here are a few of the most well-known:

  1. Willie Nelson
  2. Johnny Depp
  3. Mike Tyson
  4. Walt Disney
  5. Abraham Lincoln
  6. Lindsay Lohan
  7. Donald Trump

But those are just a few. And their stories are fascinating!

Some of them went bankrupt due to poor financial planning, a large number did so due to complicated reasons, others due to living a too-lavish lifestyle, while for others, life-threatening medical issues that ate up a sizable portion of their income.

This article entails the 19 most famous celebrities who went bankrupt and the causes of their misfortune.

1. Mc Hammer

Stanley Kirk Burrell, popularly known as “Mc Hammer”, was born on March 30, 1962. He gained popularity as a rapper, hip-hop dancer, and music producer. He is known for his hit songs “U Can’t Touch This” and “2 Legit 2 Quit”, which put his craft out there.

In the Best Long Form Music Video category, Hammer won a Grammy at the 33rd Grammy Awards, having been nominated for two. Later, he created MC Hammer: 2 Legit, which featured a large number of stars and athletes.

He earned about $70 million during his prime, from the late 1980s to the early 1990s, but as time marched on and he impulsively spent his money, he went bankrupt. He currently has a net worth of about $2 million.

2. 50 Cent

Curtis Jackson, who now stars in the series ‘Power’, accumulated a huge sum of money from the early stage of his career until about 2015, with a net worth of $250 million.

He was popular for his influence in the music industry, and in the early 2000’s he released his hit single ‘In da club’.

He was sued shortly before filing for Chapter 11 bankruptcy in 2015 to restructure his business assets. He then began a five-year plan to pay off $22 million in debt, which he completed in 2017, according to The Guardian.

50 Cent is currently one of Hollywood’s most sought-after producers and is thought to have a net worth of $40 million.

3. Stephen Baldwin

One of the three Baldwin brothers, Stephen Baldwin, established himself as a professional actor by appearing in films like “The Usual Suspects” and “The Flintstones in Viva Rock Vegas”.

In 2009, Baldwin declared himself bankrupt, claiming that he owed more than $2 million in debt, comprising multiple mortgages aggregating $1.2 million on a residence with a $1.1 million market value.

He also owed the tax authorities back taxes totaling around $1 million. He was also detained for two years’ worth of unpaid taxes. He was unable to escape his unavoidable financial troubles despite his prominence in the acting world.

4. Willie Nelson

Willie Nelson, a Texas native, is popularly known for his influence on country music in the late 90s and owned the scene with hits like “On the Road Again” and “Always on My Mind”.

Willie Nelson had to deal with the humiliation of IRS raids and asset seizures, which put him in dire financial issues.

The IRS invalidated a number of tax deductions intended to hide the majority of the singer’s income, which resulted in the tax debt stemming from tax returns filed in the 1970s and 1980s.

He currently has a net worth of $25 million.

Filing for bankruptcy requires a lot of research and advice, especially when you are on the verge of a divorce. I wrote in a recent article about how filing for divorce after bankruptcy affects you and your ex.

5. Marvin Gaye

Marvin Gaye was an American singer and songwriter born in the early 90s and died on April 1, 1984.

In 1976, Marvin Gaye declared bankruptcy because he had fallen behind on his alimony obligations. He apparently owed his ex-wife over $600,000 at the time.

He promised to pay Anna what he owed, with the terms of the agreement specifying that the first $307,000 would be an advance payment. He was popular for his hit single, “Sexual Healing”, which peaked at No. 1 on the Billboard Hot Black Singles chart.

6. Johnny Depp

Johnny Depp is well-known in the entertainment industry. He starred in movies like “Edward Scissorhands” and “Captain Jack Sparrow in the Pirates of the Caribbean series”.

The several lucrative movies Depp appeared in over his career and his acting prowess allowed him to earn top pay. Since his early days in the public eye, Depp has been renowned for his distinctive taste. The American actor, without any doubt, had a lavish lifestyle.

The multi-talented actor now has a net worth of $250 million, and with earnings of $75 million, he was recognized as the highest-paid actor in the world in the Guinness World Records of 2012.

7. Meat Loaf

American rock musician and actor Michael Lee Aday, better known by his stage name Meat Loaf, was born on September 27, 1947, and passed away on January 20, 2022.

He was renowned for his spectacular live performances and powerful, versatile voice. He is among the most popular musicians. Aday has appeared in over 50 films and television shows.

The musician was having a successful career until things went south with his record label over a dispute. He had to file for Chapter 11 bankruptcy because he was the target of about $80 million in lawsuits, amounting to around 45 lawsuits.

The dispute between Meat Loaf and this record label was eventually resolved, and a project was released, “Bat Out of Hell II: Back Into Hell”, which made album sales of over 14 million copies around the world.

8. Mike Tyson

Mike Tyson amassed millions of dollars during his sporting career, but as he acknowledged himself, at some point in his life, he lost all of it after mismanaging and wasting his money.

On March 6, 1985, Tyson made his professional boxing debut. He didn’t compete again until 2005. He amassed enormous wealth many estimates to be more than $400 million—but he also lost everything, and he was transparent about what happened to the money.

The world heavyweight title holder’s lavish spending led to his financial crisis. He spent part of his fortune on luxuries such as diamond necklaces, a gold bathtub, and even Bengal tigers.

9. Kim Basinger

At the age of 16, actress Kim Basinger started her career in Hollywood by making appearances on television, including 1976’s “Gemini Man”.

She enjoyed a successful career up until 1992, when, at the height of her success, the actress encountered some significant financial difficulties.

After verbally committing to play the lead in the film, she was sued for breach of contract. Basinger was judged responsible for the Main Line Pictures contract breach.

Due to Basinger’s withdrawal, they calculated a loss of $6.4 million in potential local and international sales. The actress was required to pay $7.4 million in damages, which had a negative impact on her financial situation.

10. Lindsay Lohan

In movies like “Freaky Friday” and “Mean Girls”, Lindsay Lohan played pivotal roles that helped her build a successful career. She amassed earnings of up to $28 million through acting.

She had a somewhat lavish life too, and her income couldn’t support it in the long run. Due to Linsday’s financial difficulties, including her unpaid back taxes, the IRS had to seize control of her bank accounts.

She was able to get back on her feet gradually and now has a net worth of over $1 million.

Chapter 13 of the bankruptcy code allows you to pay your debt over time with protection against creditors, but bankruptcy can make it hard to rent an apartment or house. I wrote in a recent article about other benefits of chapter 13 bankruptcy. Click on the link to find out.

11. Nicholas Cage

Nicholas Cage, an Oscar-winning actor who starred in critically acclaimed films like “Gone in Sixty Seconds” and “National Treasure,” amassed a wealth of up to $150 million through acting.

He previously held the title of Forbes’ highest-paid actor; he was reported to earn around $40 million in a single year.

He invested his money in relics like a dinosaur skull, real estate, and other pricey items for his enjoyment. But in 2009, the IRS issued a $6.2 million tax lien to the actor.

He blamed his financial mismanagement on his financial manager and later sued him for fraud and negligence.

12. Larry King

Larry King, whose real name is Lawrence Harvey Zieger, was born on November 19, 1933. Larry King is well-known for his role as anchor of the CNN program Larry King Live.

His financial problems eventually caught up with him when, in 1971, he was detained and accused of grand larceny. He is accused of stealing $5,000 from Louis Wolfson.

Although the allegations were later dropped, his reputation had already been damaged, which led to his termination from his radio hosting position. He had a $352,000 debt altogether, which compelled him to file for bankruptcy in 1978.

Bankruptcy Filing helped Larry King regain his financial stance. He used his second chance to make things right and get on the right track.

13. Toni Braxton

Since the 1990s, Toni Braxton has been a seductive R&B diva. Popular for her love melodies and heartbreak music

However, in 1996, after releasing her second album and selling over 15 million copies of it, she filed for chapter 7 bankruptcy, claiming she owed an incredible $50,000,000 in debt. She eventually emerged from her financial difficulties.

After devoting three years of her career to focusing on her health problems, she filed for bankruptcy a second time in 2010. For the star, challenging times did not.

Braxton Family Values, Toni’s family reality show, has been airing since 2011, and she later settled her bankruptcy case in 2013.

14. Walt Disney

In 1920, the talented artist, cartoonist, and filmmaker Walt Disney founded his first business. The company produced short commercial films and cartoons, and they appeared to be successful.

But then things changed, and he was forced to declare bankruptcy when the distributor started defrauding Disney of his money, leaving the aspiring director without the money he needed to fulfill his expenses.

Walt Disney filed for bankruptcy, which preserved most of his assets, due to rising debt and a lack of cash to pay his payments. “Mickey Mouse”, Disney’s most recognizable creation, debuted in 1928, as did “Snow White and the Seven Dwarfs” many years later.

Michigan laws aren’t any different from other states. Accordingly, if you are wondering how many times you can file for bankruptcy in Michigan, I wrote about it in a recent article. Click on the link to read the full article on this website.

15. Gary Coleman

Gary Coleman’s portrayal of Arnold Jackson on “Diff’rent Strokes” helped him grow into a great child star. The actor would have appeared quite wealthy, given Coleman’s fame and the long-running series.

Unfortunately, he encountered several difficult circumstances throughout his adult years, and in the end, he lost almost everything he had previously acquired.

In 1999, he declared bankruptcy, claiming that persistent money problems were due to mismanagement. Coleman spent most of his adult life dealing with legal and health issues.

However, prior to this, Gary Coleman filed a lawsuit against his parents in 1989, claiming they had mismanaged his funds. At the time, Coleman’s trust fund should have been worth up to $18 million,

16. Mark Twain

Another well-known figure who had to file for bankruptcy was the American author and comic Mark Twain, whose real name was Samuel Langhorne Clemens.

Due to his dislike for his old publisher, Twain decided to take control of the publishing of his books, which led to his financial ruin.

He used his funds to fund the development of an automatic typing system, but it was eventually abandoned because James Paige’s typesetting machine was late in arriving.

Twain had to declare bankruptcy since he could not continue funding the machine and operating his publishing company.

17. Dennis Rodman

The five-time champion is among the most well-liked NBA basketball players ever. For 14 years, the legendary Dennis Rodman played in the league and made millions.

Rodman also showed up in court to answer allegations that he owed an ex-wife over $800,000 in child support. According to Rodman’s attorneys, he was bankrupt and unable to make payments.

Sadly, the previous tenth-highest-paid player in the league in 1997-1997 lost everything as a result of his lifestyle and bad choices.

18. Abraham Lincoln

Due to a failed business, Abraham Lincoln, the sixteenth president of the United States of America, had to file for bankruptcy in 1833. Early in his twenties, Lincoln held various part-time jobs throughout the town and tended bars in addition to working at a basic store.

Lincoln made the decision to create his own general store after the store where he worked closed. In New Salem, Illinois, Lincoln established a general business with a buddy.

Lincoln and a friend borrowed money to purchase inventory from other stores with the intention of reselling the items for a profit.

Lincoln was forced to sell his store equity when his business partner passed away later. The future president was responsible for the $1,000 in overdue bills.

Lincoln didn’t have access to current bankruptcy laws, so his creditors filed a lawsuit against him and seized his two remaining assets. Certainly, the most famous person to go broke.

19. Donald Trump

Donald John Trump, an American politician, media figure, and businessman, was the 45th president of the United States from 2017 to 2021. He was born on June 14, 1946.

Donald Trump is the sole owner of the Hard Rock Hotel & Casino Atlantic City, a casino and hotel on the Boardwalk. The casino, which was formerly known as the Trump Taj Mahal, was opened by its then-owner, Donald Trump, in 1990 and cost close to US$1 billion to construct.

In 2014, as its parent company filed for bankruptcy, the Taj Mahal was on the verge of being shut down, but under the new ownership of Icahn Enterprises, it was able to stay operational.

DUMBEST Celebs Who Went Completely BROKE

Conclusion

The subject of bankruptcy affects a lot of well-known people. A lot of celebrities lack financial preparation. Desire for expensive items and the inability to hire qualified financial consultants account for the majority of the reasons why they become bankrupt.

In this article, I went through 19 well-known celebrities who filed for bankruptcy due to poor financial management or health difficulties.

Bankrupt 566 by Atomic Taco is licensed under CC2.0 and was cropped, tied, merged, and had a text overlay added. Image by David Mark from Pixabay

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