While the simple reason for bankruptcy is debt, the actual circumstances that lead to filing can be varied and unexpected. And bankruptcy can happen to anyone—even celebrities. In fact, their stories highlight the paths that can lead to bankruptcy and how to move forward afterward.
Tyson’s case is probably what you imagine when you think of bankruptcy, as he was driven into debt by lavish spending. The boxer reportedly spent $410,000 on a birthday party. He bought limousines, expensive jewelry, and Siberian tigers. When he filed for bankruptcy in 2003, he had incurred $23 million in debt.
Tyson’s case illustrates the most obvious lesson for those facing debt: don’t spend more than you bring in. Sudden wealth can be especially hard to manage if you don’t have a plan or track your new income and expenses. Know your limits.
Out of control spending didn’t sink the soul singer, a tricky divorce did. Alimony expenses drove Gaye $600,000 into debt. Unable to pay, he was forced to file for bankruptcy to find a solution, eventually agreeing to pay his ex-wife the royalties from his next album.
Many people may not realize that divorce costs and alimony payments are a common cause for bankruptcy. When filing for divorce, make sure you have a lawyer on your side who will negotiate an agreement that won’t saddle you with unmanageable spousal or child support. If your current divorce agreement left you overwhelmed with debt, consult a bankruptcy attorney to explore your options for debt relief.
Much like Marvin Gaye, Basinger filed for bankruptcy after incurring legal debts. After backing out of the film Boxing Helena, the actress was hit with a breach of contract lawsuit, leaving her owing $8.1 million. Since the actress was only worth $5.4 million at the time, she was unable to pay back the debt, causing her to file for bankruptcy.
Lawsuits are a common but unforeseen reason for bankruptcy. The legal fees, as well as the judgment if the case is lost, can strain anyone’s resources to the breaking point. If you’re facing a lawsuit that you fear will bankrupt you, contact an attorney immediately to assess your situation.
That’s right, even Disney went through bankruptcy! In 1920, he formed his first studio, Laugh-O-Gram. Unfortunately, his financial backer went broke, leaving him responsible for the company’s debts. Unable to pay without this backing, Disney filed for bankruptcy. Of course, he then went on to launch a new company, created Mickey Mouse, and the rest is history.
Disney’s case highlights the dangers of business liability. Depending on your business structure, you can be held liable for some or all of the company’s debts. Speak with one of our business attorneys to understand your personal liability within your business before you face a scenario like Disney. If you already find yourself struggling with debt after a backer, partner, or business associate left you liable, contact a debt relief lawyer immediately to get your career back on track.
Because, yes, bankruptcy can put you back on track. By taking the necessary steps to get out of debt, you can start over with a fresh, bright financial future. Contact the bankruptcy and debt relief attorneys at Perez Law Group, PLLC to learn more: (602) 730-7100 or (866) 59-PEREZ.