Famous People Who Have Filed Bankruptcy
As a result of the COVID-19 pandemic, more and more people are falling behind on their mortgage payments, car payments, credit card bills and all other types of debt. You do not need to feel alone or embarrassed if you have to file bankruptcy. Many famous people file bankruptcy every year including entertainers, business leaders, athletes and even politicians to get rid of their debt and get a Fresh Start.
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.
Many famous entertainers and musicians have filed for bankruptcy. These are some of the most famous cases.
Kim Basinger (1953- ), an actress, made so much money from her movies that she bought the town of Braselton, Georgia, for $20 million. After buying the town, Basinger was sued for breach of contract for pulling out of the movie “Boxing Helena.” She filed for bankruptcy in 1998 because she could not pay the damages from the lawsuit. 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 before filing bankruptcy in 1998. When she filed, Braxton was $3.9 million in debt and all of her household possessions, including the two Grammys she received in 1997, were priced to sell to 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 as a result of an expensive divorce and significant tax problems. Bankruptcy did not stop him from being successful. In the 1980s, he released some of the most well-known songs of his career, including the Grammy-winning “Sexual Healing.” Gaye died in 1984 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, started on a late night talk radio show which 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 successful 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 continued to perform after filing bankruptcy.
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 sold more than 44 million copies of his 1977 album “Bat Out of Hell”. You may also recognize him from roles in “Fight Club” and “The Rocky Horror Picture Show.” In 1983, Meat Loaf declared bankruptcy as he was $1.6 million in debt at the time.
Willie Nelson (1933- ) is a country music singer-songwriter, as well as an author, poet, actor and activist. Nelson went broke as a result of owing millions to the IRS in back taxes. The IRS 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 – 2017), a musician, was part of the group Tom Petty and the Heartbreakers. In 1979, when he filed for Chapter 11 bankruptcy, he was $500,000 in debt. He declared bankruptcy to get out of his contract with Shelter Records and negotiate a very lucrative new deal with MCA Records.
Rapper 50 Cent (Curtis Jackson) (1975- ) a rapper, actor, businessman and investor. In 2015 he filed for Chapter 11 bankruptcy with debts of between $10 million and $50 million. He remained successful and continued to perform after his bankruptcy.
Burt Reynolds (1936-2018), a movie actor, was more than $10 million in debt when he filed for bankruptcy in 1996, after his much-publicized divorce from Loni Anderson. Reynolds’ dinner theater was foreclosed on by the mortgage lender and his ranch was sold. After his bankruptcy he continued to act 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 in the movies and on television.
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.
Many very successful business leaders have filed bankruptcy at some point in their careers. These are a few of the most famous. After reading the list you will realize that bankruptcy is not the end of success-sometimes it’s just a detour on the way.
Phineas Taylor Barnum (P.T. Barnum) (1810-1891), was considered the great American showman. In 1871 he filed bankruptcy because he had losses from unsuccessful businesses. After bankruptcy, he started his famous circus, “The Greatest Show on Earth” which merged with the circus run by James A. Bailey. The circus which was called Barnum and Bailey performed for 146 years until it closed in 2017.
Henry Ford (1863-1947), was an automobile manufacturer and the inventor of the assembly line. Before creating the Fords Motor Company in 1903, Ford had 2 unsuccessful car manufacturing companies. In fact, his first company filed for bankruptcy. Henry Ford filed for personal bankruptcy in 1901 after his first company failed.
Henry John Heinz (1844-1919), an entrepreneur started a small company at the age of 25 which sold horseradish, pickles, sauerkraut and vinegar. The company failed and in 1875, Heinz was in substantial debt and filed for personal bankruptcy. Shortly after filing bankruptcy he started a new company which continues to be prosperous today. One of the company’s first products was Heinz tomato ketchup, which is still popular
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 famous filmmaker, cartoonist, overall genius and household name, began his first company in 1920. As a result of various issues surrounding this company Disney could not pay his bills and filed bankruptcy in 1923. The same year as his bankruptcy, 1923, Walt Disney started a new company which he financed with a loan from his parents and brother. In 1928, Walt Disney created Mickey Mouse and the rest is history. He died a very rich man in 1966.
- 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. After filing bankruptcy Twain wrote several of his most famous books.
The athletes listed below are just a few of the famous athletes, in all types of sports, who filed for bankruptcy.
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. In 1981 Griffin filed bankruptcy 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), a great athlete, was a legendary Hall of Fame football quarterback. As a result of several unsuccessful businesses he filed for Chapter 11 in 1991.