5 Famous Cases of Bankruptcy

Posted on : September 19, 2015

Famous Cases Of Bankruptcy

Bankruptcy is common, and even celebrities and people who have earned millions of dollars need to file for it to get out of debt. Here are 5 famous cases of bankruptcy that may surprise you, as well as what to do if you and your own family are overwhelmed with debt.

  1. Willie Nelson

    Willie Nelson is a popular singer and songwriter; however, that didn't stop the IRS from levying him with $16.7 million in back taxes in 1990. His assets were seized, and he sold a double record solely for the purpose of paying the IRS. He sued his accounting firm and won, and he was able to pay back his debts in full by 1993.

  2. Suge Knight

    The former CEO of Death Row Records, who produced music by stars like Tupac and Snoop Dogg, made millions. However, he was ordered by a suit to pay $107 million to Lydia Harris, someone who was cheated out of 50% of the stake in the record company. In 2006, Knight filed for bankruptcy with $11 to his name. He subsequently recovered and has started a new record company.

  3. Kim Basinger

    Popular actress Kim Basinger averaged a $10 million paycheck for each role in the 1990s, and was able to buy the town of Braselton, Georgia. Basinger signed a contract for the film "Boxing Helena," but then had to pull out, which costed her $8 million. After that event, she had to file for bankruptcy and sell Braselton for just $1 million - $19 million less than she paid for it.

  4. Debbie Reynolds

    The well-known 1950s actress was very well paid and made multiple millions from her roles. However, the star's second husband caused her significant financial stress when he got into financial trouble after bad investments and gambling. She divorced him and recovered, but unfortunately purchased a casino that didn't get nearly enough cash flow. In 1997, Reynolds was forced to sell everything and declare bankruptcy.

  5. Bud Post

    In 1988, Bud Post won the national lottery, worth $16.2 million at the time. Like many lottery winners, he spent the money on frivolous purchases, including three homes, multiple vehicles, and electronics. He filed for bankruptcy and fell into depression, suggesting that the lottery was the worst thing that happened to him. He passed away in 2006 without any cash or assets.

What to Do If You Are Overwhelmed With Debt

Even if you don't have millions of dollars on the line like many of these famous people, being overwhelmed with debt can cause significant stress for you and your family. Overcoming your financial problems and getting back on track is key, and bankruptcy can help you do that. Although many of these people didn't rebuild after declaring bankruptcy, some did and you can too with the help of an experienced bankruptcy lawyer.

At Farhat Law Firm, APC, we have the expertise and resources needed to guide you through a successful bankruptcy experience and help you get your financial freedom back. Call today for a consultation to discuss your financial needs at (951) 808-0529.