We often see rich and famous people living glamorous and lavish lifestyle and enjoying spotlight, but what we don’t know is they too have their own struggles. While many celebrities have inspiring rags-to-riches stories, their downfall are just as real. From actors, musicians to sportsmen, the success that they achieve during their career or lifetime, might get to their heads, leading them to mismanage their finances, landing them in bankruptcy and legal troubles.
Take a look at some celebrities, who indeed struggled to reach where they are, but also faced challenges in managing their finances, ultimately finding themselves in bankruptcy.
Michael Jackson
The first name that comes to our mind when we think of this topic is none other than Michael Jackson, who was broke and was even unable to pay a $70m loan to the Bank of America, as per his financial advisor. Still the king of pop continued spending huge amount of money on luxury items like cars, and reportedly spent about $2 million each month despite not having enough money. As per court documents, by the time he passed away in 2009, he owed more than $500 million to creditors.
Mike Tyson
Next on the list is heavyweight superstar Mike Tyson, who had officially filed for bankruptcy in 2003. Even though he earned $400 million over 20 years, court documents showed that he spent $400,000 a month to maintain his lifestyle. Between 1995 and 1997, Mike reportedly spent $9 million on legal fees alone. When he filed for bankruptcy, he was in a total debt of $27 million.
Sharon Stone
In 2002, Sharon Stone suffered a stroke. She said that during her long recovery, people took advantage of her. The Academy Award-nominated actress further revealed that she had savings of $18 million from her successful career, but when she checked her bank account, all her money was gone, and things, like even her refrigerator and phone was in other people’s names. Despite being a big star in the industry during the 80s and 90s, she said that people had forgotten her when she took time off.
50 Cent
The rapper rose to fame with his debut album Get Rich or Die Tryin, and with the money he made, he even purchased a million-dollar mansion that used to belong to Mike Tyson. Over the years, he continued releasing a few successful records and earned a total of over 30 million sales. However, due to poor investment choices, he faced financial issues and filed for bankruptcy in 2015. By declaring bankruptcy, he was able to avoid losing everything.
Francis Ford Coppola
By 1992, Francis had filed for bankruptcy three times in nine years. According to his spokesperson, the Oscar-winning director had financial issues mainly because of his 1981 film One From the Heart, that was a blunder at box office. In his documents, Francis reported having $98 million in debts and $53 million in assets. Since then, he had been able to avoid getting into serious financial issues. But recently, he had invested his own money of $120 million in a big project Megalopolis.
Drake Bell
In 2014, Drake Bell filed for bankruptcy. According to legal documents, he was $581,000 in debt, after which the bank took away his $2 million Los Angeles home. Although the actor was earning $2,820 each month, his monthly expenses were much higher, which was around $18,771. It is reported that he also had unpaid taxes.
Dionne Warwick
In 2013, the legendary singer filed for bankruptcy, citing tax debt dating back to 1991, which totaled over $10 million. Her publicist revealed that poor financial management from the late 80s to mid-90s led to bankruptcy. In the petition, she claimed that her monthly income was $20,950 but her expenses were $20,940. Although she had paid back her original taxes, her publicist mentioned that the remaining debt was due to interest and penalties. In 2019, the case was dismissed.
Aaron Carter
From his music career and various acting jobs on TV and Broadway, Aaron Carter had reportedly made $200m that too before he turned 18. However, Aaron claimed that his parents mismanaged his finances, because of which he was left with only $2m, and taxes debt of $4m. In 2013, the pop star declared bankruptcy.
When Aaron passed away in 2002, he was 34 and his net worth was reportedly $400,000. Since he had not made a will, his assets likely went to his son.
Kelly Rutherford
Kelly was involved in a long and expensive custody battle with her ex-husband Daniel Giersch, over their two children some 15 years ago. After spending almost $2 million in legal fees, she filed for bankruptcy in 2013.
Toni Braxton
The R&B singer received only $1,972 after signing her first recording contract, as she had to pay back her record label for various costs. In 2015, she revealed the struggle of artists, she said that after they get an advance for their next album, they often end up borrowing money for future projects, which can keep them in debt. In 1998, Toni filed for bankruptcy due to financial problems.
After 10 months, she faced a series of health issues including a benign breast tumour that forced her to cancel a series of Las Vegas shows. She tried to negotiate with her creditors to pay off her debts for months. Ultimately, she decided to file for bankruptcy for the second time in 2010 after facing the foreclosure of her $2.6 million home in Duluth, Georgia.
Cyndi Lauper
Before she found success as a solo artist, Cyndi was a part of a band named Blue Angel, whose debut album was a flop and she filed for bankruptcy in 1981. Later, she turned to restaurant and retail jobs to support herself while continuing her music career. She got her big break in 1983 with her album She’s So Unusual which had several classics like “Girls Just Want To Have Fun” and “Time After Time.”
Kim Basinger
Kim Basinger faced both financial and reputational trouble after she dropped out of the film Boxing Helena in 1993. The makers had to cast another actress for the role and the film studio Main Line Pictures claimed that they lost nearly $6.4 million in potential ticket sales as Kim backed out, and they even sued her for breaking the contract. When Kim was ordered to pay $7.4 million to cover the losses, she filed for bankruptcy, as her lawyers said that she didn’t have enough money to pay them. The case was dragged for four years before they reached a settlement.
David Crosby
David Crosby struggled to launch himself as a solo artist during his early years in the music industry, because of which he had to declare bankruptcy in 1985. He found success as a founding member of the Byrds, and later, as a part of the supergroup Crosby, Stills, Nash & Young, which helped him enjoy a lucrative career. However, in later years, he faced financial issues and revealed that his income suffered after COVID-19, which prevented him from performing live.
Nicolas Cage
In 2009 alone Nicolas’ earned $40 million. However, the actor was also a big spender and purchased several homes, automobiles and rare artifacts. However, in 2015, there were reports that Nicolas exhausted his $150 million fortune from 1996 to 2011. The IRS put tax liens on several of his properties and even made the actor pay $6 million for not paying his taxes from 2007. Due to financial issues, Nicolas had to sell many of his personal belongings including his treasured comic book. By 2017, his net worth was reported to be $25 million.
Floyd Mayweather
Floyd Mayweather was known as Money for never losing a boxing match. However, Money Mayweather owed money to the IRS! Since he failed to pay tax, he was in a $22.2 million debt to the IRS, even though he returned from retirement with a highly profitable fight. In 2018, there were reports that he might again come of retirement to pay off his debts.
Stephen Baldwin
In 2009, The Young Riders actor filed for bankruptcy due to owing money for taxes and several mortgages. In 2017, his trouble continued as his house was foreclosed after he failed to make mortgage payments for six years. He was also arrested and was imprisoned for five years of probation for failing to pay taxes for three years in a row.
MC Hammer
The rapper became famous for his hit song “U Can’t Touch This” and soon earned $30 million. He bought a $1 million mansion, spent an additional $30 million making changes to it and even employed 200 staff members in his house. He also purchased a horse stable for 19 racehorses. Because of this extravagant spending along with many lawsuits, the rapper had to file for bankruptcy in 1996 and owed $13 million.
Dennis Rodman
Dennis, who played for several NBA teams was known for being a great rebounder, before becoming a famous and quirky celebrity. He also became an unofficial U.S. ambassador to North Korea. However, financially, he faced struggles like several other celebrities. In 2012, his lawyers described him as broke and sick, as he struggled to pay his living expenses and could not afford child support, owing over $800,000 in back child support. He also faced accusations of stealing a 400-pound amethyst crystal from a yoga studio and clothes worth $500 (which were branded like- Spiritual Gangster and Lululemon). However, he denied the accusations and mentioned that they were given to him as gifts.
Meat Loaf
In the late ’70s, Meat Loaf became popular for his film, Rocky Horror Picture Show and even released album Bat Out of Hell. However, after success, he faced financial issues and filed for bankruptcy in 1983. In a 2003 interview, he revealed that he was hit with 45 lawsuits, which added up to $80 million. He also stated that he didn’t have much money as CBS didn’t pay him his royalties until 1997. In 90s, he returned with his song “I’d Do Anything For Love (But I Won’t Do That),” which was a hit.
Marvin Gaye
In 1976, Marvin filed for bankruptcy as he failed to pay alimony to his first wife Anna Gordy Gaye. The popular musician was ordered by a judge to pay her $600,000, the money that he would earn from his next album. Sadly, he was shot by his father in 1984, during that time, he still owed his first wife nearly $300,000 in unpaid alimony.
Burt Reynolds
In 1980s, the legendary actor spent a huge amount of money on a lot of things like houses, a private jet, expensive wigs and 150 horses. He also had an expensive marriage and divorce to actress Loni Anderson. Because of high spending and less earning, Burt couldn’t pay a loan of $3.7 million to CBS, and declared bankruptcy in 1996, during which he was in debt of over $10 million. In a 2015 interview, the actor admitted that he lost a lot of money due to his overspending.
Willie Nelson
Willie was not only popular country music singer, but was also known as marijuana smoking icon. The legendary country musician was in trouble for avoiding federal taxes and owed the IRS $16.7 million, including interest and penalty. Although his lawyers managed to reduce the amount to $6 million, he still couldn’t pay. In 1990, the IRS took everything he owned, including 20 properties and most of his instruments and music collections. In order to raise money, he recorded album called “The IRS Tapes: Who’ll Buy My Memories.” Thanks to his fans, who also organized fundraisers, because of which he was able to pay off his debt.
Gary Coleman
In 80’s this high-profile child star was making $70,000 per episode of Diff’rent Strokes. However, by the time the show ended, his adopted parents and business advisor mismanaged his money. Post which, Gary struggled to find work in Hollywood. Although he won a legal case against his parents and business advisor, he filed for bankruptcy in 1999. After paying his lawyers and making poor investments, he had to work as a security guard. Gary also faced legal issues in the early 2000s, and passed away in 2010.
Wayne Newton
Wayne was known as Mr Las Vegas because he made it big as a Las Vegas lounge singer and became the highest-paid performer in 1983. However, in 1992, he went bankrupt with $20 million in debt. Although he managed to come out of it, money problems continued. In 2005, the IRS sued him for not paying $1.8 million in taxes from the sale of a house. In 2010, his 40-acre estate, Casa de Shenandoah, was seized, as he couldn’t repay a loan of $3.35 million. Later, it was agreed that the property could be turned into a public attraction. However, in 2018, the property, which was closed for renovations, never reopened.
Larry King
Larry King began his career as a radio announcer in Miami in 1950s and 60s. But in 1971, Larry got into legal trouble when he was charged with a grand larceny for allegedly stealing $5,000 from his business partner. Although later the charges were dropped, this incident affected his career leaving him in a huge debt. In 1978, the host filed for bankruptcy. Luckily, the same year changed his life and career, as he was offered a national radio talk show in Washington, D.C., The Larry King Show, which made him popular.
Teresa Giudice
Teresa Giudice and her husband Joe Giudice were accused by creditors of hiding assets and charged with bankruptcy fraud, along with other conspiracy to commit and wire and bank fraud, after they claimed they were $10 million in debt. However, in 2016, the couple settled the case and filed a legal malpractice lawsuit against their former lawyer. Reportedly, they are still paying back taxes to the IRS and the New Jersey Department of Revenue.
T-Pain
In an interview with The Breakfast Club, the singer and rapper revealed that from having $40 million during the peak of his career, he went on to having little money in bank that he had to borrow money just to buy his kids Burger King. He said that bad investments and bad spending habits led to his struggles, and added that now he has learned to manage his money more responsibly.
David Cassidy
As per People magazine, the pop culture idol filed for bankruptcy in 2015, even though he sold over 25 million records at the peak of his career. Apart from financial issues, the singer also struggled with alcohol-related issues, including multiple DUIs. After his third DUI, his wife Sue Shifrin-Cassidy filed for divorce in 2014, and to pay for his divorce, he had to auction his mansion and even gave a tour of it to AP.
Isaac Hayes
Un 1976, Isaac filed for bankruptcy stating he owed taxes of $6 million. In 1977, the Rock & Roll Hall of Famer revealed to Ebony magazine that it was due to his poor management by record label, lavish spending and trusting wrong people, he suffered financial loses. Despite his struggles, he managed to create music, open a couple of restaurants and even write a best-selling cookbook.
Alex Jones
In December 2022, Alex filed for Chapter 11 bankruptcy protection, claiming he had a debt of about $1.5 billion. This bankruptcy came after a court ordered him to pay hundreds of millions in damages to families of children killed in the Sandy Hook Elementary School massacre in 2012, which Jones referred to as a “hoax.” The attorneys representing Sandy Hook families called the founder of InfoWars’ bankruptcy filing as cowardly. However, Alex asserted that he would prove that he didn’t have money. As per his legal document, his assets are estimated to be between $1 million and $10 million.
Sonja Morgan
After divorcing her husband in 2010, Sonja filed for Chapter 11 bankruptcy. The Real Housewives of New York City star claimed that she owed $19.8 million to her creditors and only had $13.5 million in assets. In 2015, she settled her debt.
Abby Lee Miller
In 2010, the Dance Mom star filed for personal bankruptcy, claiming that she owed a debt of $400,000. However, in 2017, she was found guilty of bankruptcy fraud when federal investigators discovered over $775,000 in hidden bank accounts. Abby received a sentence of one year and a day in federal prison, followed by two years of supervised release. She also had to pay $40,000 fine and a $120,000 judgment. She was released from prison in early 2018.
Young Buck
The rapper filed for bankruptcy twice, one in 2010 and another in 2020. Young Buck not only owned money to G-Unit Records, but also to its co-founder, 50 Cent. The rapper blamed 50 Cent for his bankruptcy.
Dina Lohan
To save her family home, actress Lindsay Lohan’s mother Dina filed for bankruptcy in 2018 and claimed that she owed $1.7 million in debt. Reportedly, JPMorgan Chase had sued her for missing payments. She also owed $4,600 in taxes to the state of California and $9,000 in taxes to New York. In 2004, Dina bought the house for $650,000.
Michael Vick
In 2007, Michael was found guilty for his involvement in a dog-fighting ring and was imprisoned for 19 months. In 2008, he filed for bankruptcy, claiming he owed debts of $17.6 million. The former NFL quarterback later paid back most of his money $17.4 million.
Gary Busey
In 2012, Gary declared bankruptcy. He owed between $500,000 and $1 million in debt and had assets worth less than $50,000. Although he bounced back later that same year, the actor faced legal issues in 2022, as he was charged with sex offenses for allegedly inappropriate behavior with fans at a convention.
La Toya Jackson
After the Moulin Rouge club in Paris sued her for $650,000, singer and TV personality, and late Michael Jackson’s older sister declared bankruptcy in 1995. The club claimed that she didn’t complete her six-month contract with them. In 2010, she tried to reopen her bankruptcy case, but a judge rejected her request.
Lil’ Kim
In 2018, the rapper filed for Chapter 11 bankruptcy to save her New Jersey mansion and reporting debt of nearly $4 million. By 2019, she became financially stable because of her participation in the VH1 reality show Girls Cruise, and requested the judge to close the case.
Anna Nicole Smith
In 1994, Anna, who was 26-year-old, married billionaire J. Howard Marshall, who was 89-year-old. He passed away a year without including her in his will. In 1996, the model filed for bankruptcy, which led to several heated legal fights between the billionaire’s children and Anna, over his estate, going all the way to Supreme Court. Sadly, Anna died from an overdose in 2007.
Janice Dickinson
In 2013, Janice filed for bankruptcy, claiming she owed about $1 million to the IRS and several plastic surgeons. The former supermodel later received a huge settlement from Bill Cosby’s insurance company, after suing him for defamation.
Sinbad
After being listed among the 10 worst tax debtors in California, in 2009, Sinbad filed for bankruptcy, claiming he owed $2.5 million in personal income tax. The comedian even sold his house to pay off his debts.
Tom Petty
In 1979, Tom filed for bankruptcy as he didn’t have money and also he used it as a legal strategy after his label Shelter Records was sold to much larger MCA, which refused to change the terms of Petty’s recording contract, despite him becoming successful. It is only after the musician financed his own record and declared bankruptcy, MCA agreed to release him from old contract and offered a new deal with better terms.
