Many people believe that celebrities are immune from the financial pitfalls ordinary Americans face. But this is not true – many celebrities have filed for bankruptcy protection. Here is a list of some of the most famous celebrity bankruptcies of all time…
- Anna Nicole Smith: In 1996, Anna Nicole Smith filed for bankruptcy in California after a former employee won an $850,000 judgment against her in a sexual harassment lawsuit. She was in the midst of a battle over the $1.6 billion estate of her oil mogul husband J. Howard Marshall II, who bequeathed her $0 upon his passing at the age of 90. Her claim against the Marshall estate made its way to the Supreme Court, but was ultimately rejected four years after her death.
- Larry King: Before Larry King became the host of a hugely successful CNN television show, he was a fledgling Miami radio announcer. In 1971, he was arrested for stealing $5,000 from a business partner. Though the charges were eventually dropped, King lost his radio jobs. Struggling to hold down a steady job, King was forced to file for bankruptcy in 1978. Later that year, King was offered a late-night radio show in the Washington, D.C. market. It would go on to become Larry King Live.
- Willie Nelson: In 1990, famed country singer Willie Nelson ran into serious trouble with the IRS. For much of the 1980s, Nelson funneled his income into a tax shelter that was ultimately deemed illegal by the agency. Nelson’s tax bill totaled $16.7 million. After his assets were seized, Nelson filed for bankruptcy protection.
- Mike Tyson: During his illustrious boxing career, Mike Tyson made as much as $400 million. At the apex of his career, he could earn $30 million in one fight. Known for his outlandish spending habits, Tyson acquired mansions, luxury cars, and even Bengal tigers. Months after purchasing a nearly $200,000 diamond chain with cash, Tyson filed for bankruptcy. According to reports about the filing, Tyson was in $23 million of debt.
- Vince McMahon: Wrestling mogul Vince McMahon and his wife filed for bankruptcy in 1976 after amassing approximately $1 million in debt. Some of the debt was a result of an investment in a botched stunt by motorcycle daredevil Evel Knievel. The couple also had unpaid federal taxes that amounted to more than $142,000.
- MC Hammer: Pop star MC Hammer (given name Stanley Kirk Burrell) filed for bankruptcy in 1996, claiming debt of $14 million. After earning $33 million in 1991 alone, MC Hammer racked up debts that included 17 cars, racehorses, an airplane, and a home on a 12-acre property. Court filings indicated that MC Hammer owed football star Deion Sanders $500,000 at the time of his bankruptcy.
- Michael Vick: NFL quarterback Michael Vick filed for bankruptcy from behind bars in 2008. After he was convicted for charges related to his infamous dog-fighting ring, the Atlanta Falcons demanded that Vick reimburse the franchise for $20 million of a $37 million bonus. According to reports about his bankruptcy, Vick’s creditors stand to receive as much as $12 million of his income through 2015.
- Burt Reynolds: In 1996, Burt Reynolds filed for bankruptcy after his high-profile divorce from Loni Anderson left him $10 million in debt. Reynolds still has financial troubles – his Florida estate is under threat of foreclosure from Merrill Lynch Credit.
- Gary Coleman: Best known for his role on the television series “Diff’rent Strokes,” Gary Coleman filed for bankruptcy in 1999. He claimed more than $70,000 in debt in his Chapter 7 filing. The actor had suffered a series of costly medical troubles and was engaged in public legal battles with his adoptive parents.
- Sinbad: A comedic mainstay of the 1990s, Sinbad was forced to file bankruptcy in 2009 after the state of California filed a lien for more than $2.5 million in unpaid taxes.
Determining whether to file bankruptcy can be difficult. But know that you are not alone – even those who have achieved fame and fortune are faced with this tough choice.