Bankruptcy

Mar 142014
 

Strapped for CashThe American economy isn’t the best it’s ever been and therefore more and more people are falling on tough times both in their personal lives and businesses. The number of Americans filing for bankruptcy has been limited only by the fact that many are too poor to even afford it, with the average bankruptcy cost being around $1,500.

Celebrities are a small section of society that many of us believe will never come across tough times and will never have to declare themselves bankrupt. However, it’s actually easier to lose money when you have a lot of it to lose. The spending of the rich – such as celebrities – tends to be more extravagant and excessive. Celebrities who have skyrocketed to stardom often find themselves with bundles of cash and go overboard. Financial planners, business advisors, etc. attracted by the celebrity of their clients don’t always have their clients’ best financial interests at heart. This results in a number of celebrities filing for bankruptcy.

A few celebrities who’ve filed for a divorce in recent years include millionaire Donald Trump, ex-boxer Mike Tyson and actor Burt Reynolds. Trump has declared his businesses bankrupt no fewer than four times, however, sensibly, he kept his personal assets separate from his work, meaning there was no huge personal financial loss. Tyson, on the other hand, squandered his millions through personal spending and racked up a considerable amount of debt which he couldn’t afford. The athlete is a prime example of how fame, fortune and being surrounded by the wrong people can influence you and land you in a financial hot water. Famous movie star Burt Reynolds was sued after it was claimed he missed over a million dollars in mortgage payments on his Florida estate.

Perhaps money management should be included as a part of high school curriculum…

(Article contributed by Lisa Bonet)