Famous People Who Have Filed Bankruptcy

As the economy continues to struggle, more and more people are falling behind on mortgage payments, car payments, credit card bills and all other types of debt. You need not feel alone or embarrassed if you file bankruptcy. Many famous people have filed for bankruptcy and went on to be financially successful. From rock stars to athletes to today's millionaires, countless people file bankruptcy every year to reorganize their financial life.

Below is list of some of the most famous people who have filed for bankruptcy or had severe financial problems before the modern Bankruptcy Code was adopted. You will see that many of them had their greatest success and fame after their bankruptcies.

ENTERTAINERS

The list of famous entertainers and musicians who have filed for bankruptcy is long and surprising. It includes singers and actors alike. These are some of the most famous cases.

Kim Basinger (1953- ), an actress, earned so much money from her movies that she purchased the town of Braselton, Georgia, for $20 million. After the purchase, Basinger was sued for breach of contract for pulling out of the movie "Boxing Helena." She was not able to pay the damages resulting from the suit and filed for bankruptcy in 1993. As part of her bankruptcy, she sold the town. She later married actor Alec Baldwin (they have since divorced), had a child and won an Oscar for her role in the movie "L.A. Confidential."

Toni Braxton (1967- ), a five-time Grammy Award winner, sold more than 15 million albums in the years leading up to her 1998 filing for bankruptcy. When she filed, Braxton was $3.9 million in debt and all of her household possessions, including the two Grammys she was awarded in 1997, were priced to sell so she could pay off her creditors. Afterward, in 1999, she signed a new record contract worth $25 million and had hugely successful albums.

David Crosby (1941- ), a guitarist, singer and songwriter, was a member of several bands, including the Byrds and Crosby, Stills, Nash and Young. He filed for bankruptcy in 1985 as his solo career was failing. Crosby is still recording and singing.

Zsa Zsa Gabor (1917-2016), an actress, filed bankruptcy in 1994 after a judgment was entered against her for libel for more than $1 million.

Marvin Gaye (1939-1984), a musician, filed for bankruptcy in 1976 after an expensive divorce and tax problems. Bankruptcy never stopped him from coming back. In the 1980s, he released some of the most well-known songs of his career, including the Grammy-winning "Sexual Healing." In 1984, however, Gaye's life was cut short when he died at the age of 45. In 1987, he was inducted into the Rock and Roll Hall of Fame.

Larry King (1933- ), a talk show host, filed for bankruptcy in 1978. Also in 1978, he was offered a late-night talk radio show in Washington, D.C. That show later became a hugely successful CNN television show, which ran for 25 years.

Cyndi Lauper (1953- ), a singer, filed bankruptcy in 1981 after splitting up with her band, Blue Angel, and being sued by her manager for breach of contract. In 1985, she released her hit "Girls Just Want To Have Fun."

Jerry Lee Lewis (1935- ), the famous rock 'n' roll star who sang "Great Balls of Fire," filed for bankruptcy in 1988 because of huge tax debts. The Internal Revenue Service seized his cars, furniture and baby grand piano. Agents even showed up at his concerts to collect ticket sales. He has since recovered from bankruptcy and still performs.

MC Hammer (Stanley Burrell) (1962- ), a musician and entertainer, sold 18 million copies of "Please Hammer Don't Hurt' Em." He won three Grammy awards and earned more than $50 million in the 1990s. However, in April 1996, he filed for Chapter 11 bankruptcy because he did not have the income to support his lavish lifestyle and defend all the lawsuits that were filed against him.

Meat Loaf (1947 - ), a musician. His 1977 album "Bat Out of Hell" sold more than 44 million copies and is still one of the best-selling records ever. You may also recognize him from roles in "Fight Club" and "The Rocky Horror Picture Show." In 1983, Meat Loaf wasn't doing so well and had to declare bankruptcy. He was $1.6 million in debt at the time.

Ed McMahon (1923-2009), a television personality, filed for bankruptcy upon learning that he was late $644,000 on a $4.8 million loan for a home in Beverly Hills, California. His lender had filed a notice of default.

Willie Nelson (1933- ) is a country music singer-songwriter, as well as an author, poet, actor and activist. Nelson went broke when the IRS disallowed deductions and handed him a bill for millions in back taxes. They seized most of his assets to pay this debt and he declared bankruptcy. Nelson released an album titled "The IRS Tapes: Who'll Buy My Memories?" to pay what he owed. He repaid his debt in three years. Nelson was inducted into the Country Music Hall of Fame in 1993 and received the Kennedy Center Honors in 1998.

Tom Petty (1950 - ), a musician, is part of the group Tom Petty and the Heartbreakers. In 1979, he filed for Chapter 11 bankruptcy with debts of $500,000. He declared bankruptcy in an effort to free himself from his contract with Shelter Records and negotiate a very lucrative new deal with MCA Records, which had bought Shelter Records.

Rapper 50 Cent (Curtis Jackson) (1975- ) a rapper, actor, businessman and investor. He was once worth an estimated $155 million. In 2015 he filed for Chapter 11 bankruptcy with debts of between $10 million and $50 million.

Burt Reynolds (1936- ), a movie actor, filed for bankruptcy in 1996 in Florida after his much-publicized divorce from Loni Anderson. He was more than $10 million in debt. Reynolds' dinner theater was foreclosed on by the mortgage lender and his ranch was sold. Since his bankruptcy, he has continued to act in movies and was awarded the Golden Globe for Best Supporting Actor in the film "Boogie Nights."

Mickey Rooney (1920-2014), a movie actor, filed for bankruptcy in 1962 and again in 1996. After both bankruptcies, he continued to act and has had many roles in movies and television.

Anna Nicole Smith (1967-2007), a former Playmate model, filed bankruptcy in 1996 as a result of an $850,000 judgment against her. She was left without funds following the death of her wealthy elderly husband, J. Howard Marshall. The Supreme Court recently issued an important ruling in her bankruptcy case in which it held that bankruptcy court judges may not rule on nonbankruptcy law matters.

POLITICIANS

Many politicians and elected officials, including several presidents, have filed for bankruptcy. Here are some of their stories.

Abraham Lincoln (1809-1865) was our nation's 16th president. He declared bankruptcy in 1833 because of a failed business and back payments of debt. President Lincoln was required to repay his creditors over a period of 17 years, much longer than the maximum requirement in a Chapter 13 today, which is five years.

John B. Connally Jr. (1917-1993), a former Texas governor and U.S. Treasury secretary, was wounded during the assassination of President John F. Kennedy in 1963. Ruined by the collapse of oil, gas and real estate values in the late 1980s, he filed for Chapter 11 bankruptcy in 1986. At his financial peak, Gov. Connally had been worth more than $100 million.

Ulysses S. Grant (1822- 1885) was our nation's 18th president. He went bankrupt after leaving office when a partner in an investment banking firm swindled him.

George McGovern (1922-2012), a former United States senator and presidential candidate, filed for bankruptcy in 1991 when a hotel in Connecticut in which he had invested went out of business.

William McKinley (1843-1901) was our nation's 25th president. He went bankrupt while serving as Ohio's governor in 1883. He then won the White House just three years later.

BUSINESS LEADERS

Many very successful business leaders have filed bankruptcy at some point in their careers. These are a few of the most famous. After you read the list, think about it. Obviously, filing bankruptcy is not a permanent dead end on the road to success; it's just a curve along the way.

Phineas Taylor Barnum (P.T. Barnum) (1810-1891), the great American showman, filed for bankruptcy in 1871 due to losses he incurred in unwise business ventures. After bankruptcy, he organized his famous circus, "The Greatest Show On Earth." In 1881, he merged his circus with his most successful competitor, James A. Bailey, under the name of Barnum and Bailey Circus.

Henry Ford (1863-1947), automobile manufacturer and inventor of the assembly line. Ford's first two automobile manufacturing companies failed. The first company filed for bankruptcy and the second ended because of a disagreement with his business partner. Henry Ford filed for personal bankruptcy in 1901 after the first company went bust. In June 1903, at the age of 40, he created a third company, the Ford Motor Co., with a cash investment of $28,000. By July 1903, the bank balance had dwindled to $223.65, but then Ford sold its first car, and, as they say, the rest is history.

Henry John Heinz (1844-1919), the condiment manufacturer, started his company in 1869 selling horseradish, pickles, sauerkraut and vinegar. In 1875, Heinz filed for personal bankruptcy due to an unexpected bumper harvest that the company could not keep up with and could not meet its payroll obligations. He immediately started a new company and introduced a new condiment, tomato ketchup, to the market. This company was, and continues to be, very prosperous.

Milton Snavely Hershey (1857-1945), the founder of Hershey's chocolate, started four candy companies that failed and he filed bankruptcy before starting what is now Hershey's Foods Corp. Mr. Hershey had only a fourth-grade education, but was certain he could make a good product that the public would want to purchase. His fifth attempt was clearly successful.

Walt Disney (1901-1966), the cartoon creator, filed for bankruptcy in 1920 after the main client of his new business filed bankruptcy. Disney said he could no longer pay his employees or the rent and had no choice but to file bankruptcy himself. In 1923, he formed a new company with a loan from his parents and his brother. In 1928, Walt Disney created Mickey Mouse and the rest is history.

AUTHORS

L. Frank Baum (1856-1919), an author of children's books, was best known for writing "The Wonderful Wizard of Oz "in 1900. The book was an immediate success and sold about 90,000 copies in the first year. Baum put together an expensive traveling slide show and orchestra based upon the Wizard of Oz, which was a financial failure. Baum declared bankruptcy in 1911.

Mark Twain (Samuel Langhorne Clemens) (1835-1910), a pre-eminent American author, wrote many books, including "Tom Sawyer" and "Huckleberry Finn." He lost most of his money investing in a worthless machine called the Paige Compositor, an automatic typesetting machine. Twain filed for bankruptcy in 1894 and discharged all of his debts. Twain wrote several of his more famous books after filing bankruptcy, including "Pudd'nhead Wilson" and "Following the Equator."

ATHLETES

The athletes listed below are just a few of the famous athletes, in all types of sports, who filed for bankruptcy.

Jim Dooley (1930-2008) played for the NFL's Chicago Bears from 1952 until he retired in 1962 and switched to coaching. Dooley sat out the 1973 NFL season and landed a job one week after filing for bankruptcy. At that point, he was nearly half a million dollars in debt, but rebounded by taking a job as a sales manager and ended up back with the Bears in 1981 as an offensive consultant.

Lenny Dykstra (1963- ), a New York Mets baseball player and winner of the World Series in 1986, filed bankruptcy in 2009 in Los Angeles, California.

Archie Griffin (1954- ) is college football's only two-time Heisman Trophy winner. Unfortunately, Griffin had to file for bankruptcy in 1981 after an investment in six athletic shoe stores failed and caused him to have debts of $519,568.

Dorothy Hamill (1956- ) was the 1976 national, world and Olympic gold medal champion. Her problems began when she bought the struggling Ice Capades Co., which she tried to get going again. Hamill had to sell the company in 1995 and filed for bankruptcy herself in 1996.

Sheryl Swoopes (1971- ), an American professional basketball player, has won three Olympic gold medals and is a three-time Most Value Player of the WNBA. Swoopes filed for bankruptcy in 2004, blaming mismanagement of her money as the cause.

Mike Tyson (1965- ), a professional fighter, received more than $30 million for several fights and a career income estimated at $300 million. Tyson filed a Chapter 11 bankruptcy case in August 2003 because he was not able to pay all of his bills.

Johnny Unitas (1933-2002), legendary Hall of Fame football quarterback, was a great athlete, but a terrible businessman. His business ventures, which included bowling alleys, land deals and restaurants, were unsuccessful. He filed for Chapter 11 bankruptcy in 1991.

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