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Top 10 Celebrity Bankruptcies

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…

celebrity bankruptcy

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.

About the Author
Christian Spaulding is the founder and principal attorney at Spaulding Law Group. Mr. Spaulding has lived in Southern California his entire life and his family has been in Southern California since the late 1800’s. Mr. Spaulding received his undergraduate degree from Chapman University in Orange with a Bachelor of Science in Accounting. While completing his undergraduate studies, Mr. Spaulding was the recipient of the prestigious Wall Street Journal Student Business Award. Mr. Spaulding graduated at the top of his accounting program at Chapman University and attended law school at Chapman University School of Law where he was a Merit Scholarship recipient. Mr. Spaulding has focused his firm’s practice solely on consumer protection and bankruptcy since 2009.

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