Celebrities Who Have Filed for Bankruptcy

Celebrities often blame their associates for their money trouble and bankruptcy. Usually it is the business manager that takes all of the blame for the losses. Losing millions of dollars is more of a team effort though. It takes a lot of people to spend serious amounts of money like that.

Big spending and poor money management does them in!

Take MC Hammer for example. This rapper was a famous big spender. In the early 1990's, Hammer became the biggest hit. He and his entourage were known for the exorbitant spending that devoured an estimated $33 million. He filed early for bankruptcy. Michael Jackson's Neverland Ranch costs about $200,000 per month to keep running. It's easy to see why many stars go bankrupt when a day's shopping trip ends up costing millions of dollars. Mike Tyson was the youngest heavyweight boxing champion of the world. Since his reign in the boxing ring, Mike Tyson has fallen from grace. He has spent time in jail and has spent all of his money by buying tigers for pets that cost around $8000.00 each. His lifestyle came in at about $400,000.00 per month.

Huge paychecks led these celebrities down the primrose path. They had no experience in dealing with large amounts of money and rode in their limousines down the road to bankruptcy.

Donald Trump's Bankruptcy

Donald Trump is a daring businessman who likes to take risks. This has led him to file for bankruptcy twice, and still has come out on top. The Donald is famous for telling people "You're fired!" every week on television. When filing for bankruptcy the second time, it is amazing the board had not fired him.

Smart businessmen separate their finances. Trump keeps his personal finances separate from his business ventures. This protects him. When his casino went into debt for a billion dollars, his corporation filed for bankruptcy. Trump did not personally file. He consulted with his banks and bondholders, and decided to file Chapter 11. This gave his businesses an opportunity to regroup and brought his business debt down. This guaranteed his creditors would get paid. A wise move, because it also reduced his personal debt and avoided lawsuits from creditors. This insulated his personal accounts and kept him personally out of bankruptcy.

His company recovered quickly but still retained serious financial problems. After reorganization, his company's stock prices soared to double digits. Personally, his fortune exploded and he landed on Forbes most wealthy list. Donald was on top, despite his bout with bankruptcy.