Celebrities File For Bankruptcy Too

Toni Braxton


We rarely discuss the big “B” word here but bankruptcy is always an option when your debt is far above your ability to repay it. While the average Joe might be afraid to file bankruptcy, celebrities don’t have that problem. Not only have well-known celebrities filed bankruptcy, but some have done it more than once. Here are some of the most famous celebrity bankruptcies of 2011.

Toni Braxton
I should feel bad for Toni Braxton but she has filed bankruptcy not once, but twice. She blamed her reported debts of between $10 million and $50 million on her health problems. She was forced to cancel a Las Vegas run because of heart problems and then revealed that she had lupus which limited her ability to work. Health related bills are the number one reason for most bankruptcy filings.

Sonja Morgan
Sonja Morgan
Sonja is the former wife of John Adams Morgan of the whole J.P. Morgan lineage. She is also a Bravo celebrity appearing on the Real Housewives of New York throwing fabulous parties and not wearing pants. She claims to be worth $20 million but has debts totaling about $19.8 million. I wouldn’t call that bankrupt. I would say that she has a net worth of $200,000 and should stop throwing parties and start buying pants, but that’s just me.

One more thing on this subject.  Just how many of these Real Housewives woman have filed for bankruptcy? Aren’t they supposed to be portraying their rich and fabulous lives? It’s all smoke and mirrors.

Eva Longoria

She might not be a real life Desperate Housewife, but Eva Longoria is desperate to save her business interests.  Longoria filed for bankruptcy as a “preemptive measure” to protect her restaurant and night club, Beso, from a lawsuit brought by a business partner.  Hmm, bankruptcy has a tool to prevent someone else from grabbing your assets? Sneaky, sneaky, but totally legal.  We can learn something here from celebrities like Longoria.

Lenny Dykstra

I shake my head at this one because this former sports star has fallen quite a long way. In June 2011 Dykstra was indicted by a Federal Judge for bankruptcy fraud and theft.  Prosecutors say that he either sold, destroyed or removed a stove, chandelier and other items totaling $400,000 from his $18.5 million home after filing for bankruptcy.  He is also accused of lying about the value of his estate so that he could keep profiting while hiding assets from the bankruptcy courts.  According to his now former attorney Mark Werksman, “He didn’t belong in bankruptcy, he had a problem dealing with the trustees dismantling his property and investments.”   Learn from Dykstra’s mistakes by knowing exactly what you are signing off on and what you can do when you file for bankruptcy.

As you can see, celebrities are just like us.  Just because they’re good at making money doesn’t mean that they’re good at holding on to it.

Original article published by Yes, I Am Cheap at http://yesiamcheap.com.

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14 Responses to Celebrities File For Bankruptcy Too

  1. As a Mets fan, I was especially surprised when Lenny D. filed for bankruptcy, as he had become a financial planner after retirement! Not a very good recommendation for him!

  2. Thanks for sharing – It doesn’t matter how much money you make. It’s what you do with the money that counts!

  3. It astounds me that they make a ridiculous amount of money and they still have to file for bankruptcy. How sad. Apparently, they need to start reading finance blogs like these and implementing their tips.

  4. I think everyone is at risk for bankruptcy no matter how much they make. We can all be tempted to spend more than we should. Celebrities just spend to a larger extent.

    • Sandy says:

      It’s all about living within your means. I’d like to have Bill & Melinda Gates’ kind of means if you know what I mean.

  5. TSM says:

    You’d think anyone with that much money would be smart enough to hire smart people… guess not!

  6. 101 Centavos says:

    I wonder if there’s a study out there that tracks the financial health of celebrities, or people that come into “easy” money, like athletes and entertainment figures. I know that lottery winners fare rather poorly, but I would suspect that these folks do as well.

  7. Little House says:

    If you don’t understand the simple idea that spending less than you earn will help you keep your money, then just about anyone can fall into this state – bankruptcy! I’m not shocked when celebrities file for bankruptcy. They have access to loads of cash and if they don’t understand the basics of money, they can spend way more than they earn. Then of course there’s always white collar crime, which sounds like Dykstra’s problem.

  8. Edward Johnson says:

    Having watched Dykstra in interviews over the past several years I have always come away with the impression that he was “full of it.” It was only a matter of time.

  9. At least when celebrities go bankrupt, they usually have an easier time rebounding, especially ones who were at one time “big”. MC Hammer for example has rebounded by touring again off of his old success and making a very decent living.

  10. Celebrities are mortal after all. Losing investments and money can be a very difficult experience for many, but bouncing back from bankruptcy can be a complicated task to achieve too. If others can, you can too, given the right guidance and the willingness to move on the right way.

  11. Jim Plunk@bankruptcyfraudhq.com says:

    I just don’t get it. Even putting their money in fairly safe mutual funds and living off the interest they could grow their money and leave it to their kids when they die. I guess it just doesn’t matter how much you accumulate, the old saying ” a fool and his money are soon parted” is more than just a saying.

  12. Perhaps a Celebrity 101 class with Dave Ramsey or Susan Orman would be a good thing?

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