Celebrity bankruptcy is not that uncommon. why do celebrities declare bankruptcy? you would think that with all the millions they once made, they’d have some savings. The sad truth is that the more money you have, the more money you spend, (generally speaking). one of the top five reasons cited in the Fox News article on why celebrities file for bankruptcy has to do with the fact that many of them simply can’t handle their money. while they might engage a financial planner to manage their funds, the celebrity still has ultimate control on the bank account.
In the case of Toni Braxton, her monthly expenses, as listed in her 2011 bankruptcy petition, totaled $58,000 a month. Some of her debts included thousands of dollars owed to Tiffany’s and Neiman Marcus. but Braxton claims that bankruptcy was a good thing for her, as it allowed her to start over. most of her debt was discharged last August and she has since purchased a new home in Los Angeles, complete with a swimming pool, writes The Wall Street Journal.
Another big reason that many celebrities must eventually hire a bankruptcy lawyer is because they don’t plan for the future. namely, they don’t anticipate future revenue streams. It’s almost a paycheck-to-paycheck mentality. they make big bucks on one movie or deal and then assume that money will come again from the next deal.
But Hollywood is fickle. Just ask Toni Braxton, whose royalties from the massive mega-hits she once had total only $800 or so a month.
The lesson here is that bankruptcy isn’t a shameful thing and filing for bankruptcy won’t necessarily put you in the poor house. It’s a matter of taking control of your finances and allowing yourself a chance to start over.
- Find a Phoenix Bankruptcy Lawyer (FindLaw)
- Bankruptcy (FindLaw)
- Toni Braxton Filed for Second Bankruptcy (FindLaw’s Celebrity Justice)
