It is usually relatively big news when celebrities file for bankruptcy. Many sports stars, business people, and entertainment stars have all filed for bankruptcy at some time. Willie Nelson, Courtney Love, Michael Jackson, Mike Tyson, and Pamela Anderson, and now 50 Cent are just some of the celebrities who have filed for bankruptcy.
Why do celebrities file for bankruptcy?
There are many reasons celebrities are forced to file for bankruptcy.
Some of the common reasons include having to pay out after a divorce, or because the celebrity didn’t pay their taxes to the IRS. Some celebrities see their spending spiral out of control, or make rash or unwise business decisions.
Others may have a large number of hangers-on who benefit from the celeb’s wealth.
But celebs can afford anything they want, right?
For many celebrities, the onset of fame and fortune gives them the ability to afford to buy anything they see, and not have to worry about money.
Perhaps for the first time in their lives, they can now buy their own home, drive a nice car or have a high end watch or expensive jewelry. They can also treat their friends and family who helped them out in the past.
So, what can go wrong?
A celeb’s monthly expenses could include running a number of homes, a fleet of vehicles, a chef, dietitian, business adviser, accountant, personal trainer, and stylist, as well as a gardener and chauffeur. Throw in a number of red carpet events too, and those monthly expenses keep rising.
Actors or singers, who are popular one month, may not be popular the next month. They may be young and not have another hit single or be seen as old, and get dropped by their record label. Actors never have a starring role in another Hollywood blockbuster again. Sports stars may have a few bad games and be forced out of hte team, or may suffer an injury that means that they never play at the top level again.
People who suddenly or unexpectedly make it big may get fantastic pay checks, but may not get fantastic financial advice. Perhaps some financial advisers only serve their own interests, or think too short term, or perhaps want their clients to trust them to do the right thing with their money without questioning them.
Because there are so many people willing to help celebrities spend their money, from friends and families to agents and advisers. Celebrities file for bankruptcy because they often run out of money very quickly.
With constant demands on their money, and ‘guaranteed’ investment opportunities to consider, what seems like a fortune to us is suddenly hardly enough to live on.
Those that spend big when the money is flooding in, may not be investing wisely, or saving for when their bubble bursts
Can’t they just rebuild their career?
Whilst many celebs can rebuild their career on the strength of their name or their previous earnings, not everybody can. Some may try their hand at another profession in order to try and regain their popularity and earning power.
We can think of any number of former sports people or singers, who have tried acting, or actors who try their hand at singing, or running their own businesses, and some have definitely been more successful than others.
Could we the public be to blame?
We the public often scoff at celebrities who are ridiculously wealthy and extravagant beyond belief. Some would say that these people have worked hard, made sacrifices and deserve their fame and fortune, and can spend their money how they wish. Others say they should donate more to charity, friends and family
From buying solid gold pets’ bowls to having a diamond encrusted chess sets, floating beds or a luxury yacht, there seems no end of things for rich people to spend their money on. As the saying goes, a fool and his money are soon parted.
Yet hypocritically, we also can feel short-changed by those in the public eye who wear the same dress twice in public, or still drive the same old car they’ve had for years, or don’t live in a mansion.
We seem to notice when they’re not wearing designer clothes or expensive jewelry for a red carpet event, don’t fly first class or still live in the same area where they grew up.
Perhaps some celebs feel pressured into living the ‘celeb lifestyle’?
What about those with more financial sense?
There are many celebrities with more financial and commercial sense, who don’t let their fame and fortune go to their head and aren’t swayed by shiny things.
These people better understand that their popularity and earning potential can fall just as quickly as it rose, and so plan for their future.
Whilst not all celebrities file for bankruptcy, it’s easy to see why some do. Some through little fault of their own, and others by simply spending too much.
If you’re not sleeping well because you’re worrying about paying your bills, or you need bankruptcy advice, or want to learn how Chapter 7 Bankruptcy or Chapter 13 Bankruptcy could help you, then why not fill out our free Bankruptcy Evaluation Form or Contact Us at 612.824.4357 today and tell us how we can help you?