Top Celebrity Bankruptcies

Found an awesome article from Howtosavemoney.com that details the top celebrities who filed bankruptcy... When people come into our office and say they are embarrased or we hear people who are financially struggling say, "I need help but i'm too good to file bankruptcy"... we tell them that we are here to help. There is help. We help people get a fresh start, one that has afforded millionaires the opportunity to find their success... innovators to make their mark on the world and ordinary people to find peace and get a fresh start. Check out this fun read... ___________________________________________________________
Willie Nelson

Willie Nelson is one of Country Music’s living legends with over 50 million records sold but even with all those gold records he was no stranger to debt. Well known as a big spender with a generous heart, and an entourage somewhat like MC Hammer’s Willie Nelson’s finances caught up to him in the late 90′s. In 1997, the government seized Nelson’s gold records, Texas ranch and bank accounts to pay off about $16.7 million in back taxes. In true American fashion however Willie Nelson did a Taco Bell spokesperson side job and released a new album in honor of the IRS, titled “The IRS Tapes: Who Will Buy My Memories?” to raise funds and settle his debts.

Marvin Gaye

The hit singer of “I heard it Through the Grapevine” filed for bankruptcy in the 70’s after paying the divorce settlement for his first wife of 14 years, Anna Gordy. He continued to struggle, having tax and drug problems, and moved to Europe to avoid the Internal Revenue Service. However bankruptcy never stopped Marvin Gaye from coming back and in the 1980′s released some of the most well-known songs in history including the Grammy winning “Sexual Healing”. In 1984 however Marvin Gaye’s life was cut short dying at the age 45. Three years later Marvin Gaye was induced into the Rock and Roll of Fame.

Mc Hammer

Who can forget the baggy pants and dance moves which would make most people keel over in 30 seconds. The 90′s were full of glitz and gold and few can forget the famous Hammertime song by M.C. Hammer. However along with outrageous parachute pants and dance moves M.C. Hammer’s rise to fame came with a crushing blow to his personal finances. Racking up some of the biggest musical hits at the time he also had an entourage (and payroll) to match. M.C. Hammer reportedly paid over $500,000 a month to a staff of 300 people and in 1996, had accumulated $13.7 million of debt with only $9.6 million in assets. He filed for bankruptcy with debts that included $500,000 in attorney fees, $110,000 to his decorator and $100,000 to the IRS.
Meatloaf

Meatloaf has sold over 70 million records with his “Bat out of Hell” album charted for over nine years, making it one of the biggest selling albums of all time and on the VH1 list of 100 Greatest Artists of Hard Rock. He fired his managers in 1981 after finding they were stealing money from him, and the managers retaliated by having Meatloaf’s assets frozen and suing him for breach of contract. Additionally, they spread all kinds of rumors about Meatloaf behaving violently and waving guns at people. Meatloaf finally gave up and filed bankruptcy, with $1.6 million of debts. Things started to look up when he found a new producer and recorded an album in 1986, but the album tracks all had a dance beat which didn’t pan out for Meatloaf, and he was forced to file bankruptcy again. However bankruptcy never stopped Meatloaf and today he enjoys a solid following and continues to tour to sold out crowds across the world. Meatloaf has even enjoyed many TV and Movie roles over the past decade and recently was a cast member on “The Celebrity Apprentice”.

Toni Braxton

Toni Braxton, a grammy-winning R&B singer known for her sexy, sultry voice and hit songs such as “You’re Makin’ Me High” and “Un-Break My Heart” attempted to get out of her recording contract with LaFace Records in 1998 as she felt it was no longer fair. She filed a lawsuit however LaFace turned around and counter-sued her, forcing Braxton to file bankruptcy and spend most of 1998 dealing with legal issues. Braxton was diagnosed with Lupus in 2009, and has been dealing with ongoing health issues since then. Braxton filed bankruptcy for the second time in 2010, claiming to owe up to $50 million, with a net worth of only $1 million to $10 million.

Cyndi Lauper

The “Girls Just Wanna Have Fun” hit singer has had an extremely successful recording career, including her “True Colors” album, which charted at number one. However Cyndi’s beginning was not quite as successful, with a first album release together with her original band, Blue Angels. The album was a flop, and to top it off her manger sued the Blue Angels for $80,000, forcing Lauper to file bankruptcy in 1980. Cyndi Lauper’s Estimated Net Worth Today – $6 Million

Tom Petty

Tom Petty’s first albums were a smashing success with his band the Heartbreakers, although his bank account did not grow along with his fame. Record companies are infamous for restrictive recording contracts with conditions that keep even top selling artists in the poor house. When Tom Petty’s label, Shelter Records, was sold to MCA he jumped on the opportunity to declare himself a free agent. When MCA balked, Petty paid $500,000 out of his own pocket to record his next album and held it back as a bargaining chip against MCA. In 1979, he finally declared bankruptcy to gain more leverage in the legal dispute to get out his unfavorable recording contract. MCA ultimately gave in, allowing Petty out of his original contract and signing a new $3 million contract with him. His new album, “Damn the Torpedoes” was finally released featuring “Don’t Do Me Like That” and “Refugee”, went certified double platinum, and made Tom Petty and the Heartbreakers into true rock and roll superstars.

Natalie Cole

After many successful years as a recording artist, Natalie Cole (the daughter of recording legend Nat King Cole) had a career pause and problems with drug addiction in the early 80’s. By 1985 she was doing much better, but still filed for bankruptcy protection in 1997. Her career picked up again in the late 90’s, and she won the “Hitmaker Award” for the Songwriter’s Hall of Fame in 1999 . Natalie was diagnosed with Hepatitis C in 2008 and had a life saving kidney transplant but continues to record and inspire people around the world today.

Mike Tyson

Retired former heavyweight boxing champion Mike Tyson won the WBC title as a 20 year old and quickly became one of the most famous athletes in the world. He went on to have a very successful boxing career, becoming known for his ferocious style in the ring and controversial behavior outside of the ring. Although Tyson received over $30 million for several fights and a career income estimated at $300 million, he filed bankruptcy in 2003. He had a very difficult and public divorce from ex-wife Robin Givens blaming his financial situation on excessive spending on mansions and expensive cars. Tyson also blamed bad financial advisors and embezzlement as other causes for his bankruptcy. Mike Tyson’s Estimated Net Worth today is under $5 million.

Walt Disney

Walt Disney started a company named Laugh-O-Gram in 1920 to produce his first animated fairy tales. Disney started assembling his team of animators, and legend says that the office space was infested with mice, including one mouse that had a lot of personality and received a special nickname of– Mickey. His New York-based financial backers ended up going broke, and Disney could no longer cover his payroll or his debts. The company filed for bankruptcy protection, and Disney scraped together the funds to take a bus to Hollywood. Once he arrived, he put his own name on a new production company, and invented his newest animated character. The Walt Disney Co. today is one of the largest companies in the world with a market value of almost $80 Billion!

Marion Jones

Marion Jones, an Olympic sprinter with 5 medals and endorsement deals worth millions of dollars has been fighting off financial troubles for some time now. After numerous anti-doping and other agencies made allegations against her regarding steroid use, Jones missed many meets and spent substantial amounts of money on attorneys to fight the allegations. Jones also admits her own spending habits to maintain a certain “lifestyle” have forced her deep into debt. Jones has had to sell off some real estate assets, including a $2.5 million mansion she lost to foreclosure, to settle some of her debts and try to avoid bankruptcy.

Kim Basinger

In 1993, Oscar-winning actress Kim Basinger was ordered to pay over $8 million to Main Line Pictures, after she was sued for breach of contract. She was charged with backing out of a verbal agreement to star in the film “Boxing Helena.” Basinger filed bankruptcy, and the court’s decision was later reversed during an appeal.

Ed McMahon

Apparently, the real estate foreclosure crisis affected celebrities too. The legendary Johnny Carson sidekick Ed McMahon, recently deceased, had to file bankruptcy when he came up short $644,000 on the payments for his $4.8 million home loan, and the lender filed a default notice on McMahon’s Beverly Hills mansion.

Gary Coleman

Gary Coleman, former child star of the sitcom “Diff’rent Strokes” suffered financial problems due to lifelong kidney issues and poor money management. He also had to pay a settlement due to a 1993 lawsuit. The star had earned $70,000 for each episode of the show, but in 1999 had to file for bankruptcy. In 2009, he was still struggling financially, with $72,000 of debts and an accusation that the parents who adopted him had robbed his estate of approximately $1 million.

Abe Lincoln

Abe Lincoln was the nation’s 16th President. He was forced into bankruptcy in 1833, due to a poorly performing retail business and back payments of debt. Lincoln lost his last two assets, his home and some surveying equipment, and spent 17 years paying back the rest of the money to all the friends who had lent him funds to start his business.

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Posted in Celebrity Bankruptcy , ford bankruptcy , walt disney bankruptcy

How Does Chapter 7 Work?

Now we are getting to the "meat and potatoes" of the topic... How does Chapter 7 work? According to the US Courts website, here is the first step... A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. (3) In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors. (The Official Forms may be purchased at legal stationery stores or downloaded from the internet at www.uscourts.gov/bkforms/index.html. They are not available from the court.) If this seems intense - there is good news, if you hire a licensed bankrupcty attorney, such as Foster Law Offices - they will take care of the filing for you. The first step would be to schedule a free consultation where Attorney Foster of Attorney Cook will meet with you to learn more about your unique financial situation and to determine the appropriate action plan to get you the debt relief you seek. The next step is ensuring all fees are paid and on time... Again if you hire a firm to assist you with filing, they will explain this part of the process to you in detail. Moving along -- According to the US Courts website, there are quite a few additional steps neccesary to complete the official bankruptcy forms,statement of financial affairs, and schedules, the debtor must provide the following information: A list of all creditors and the amount and nature of their claims; The source, amount, and frequency of the debtor's income; A list of all of the debtor's property; and A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc. Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse are required so that the court, the trustee and creditors can evaluate the household's financial position. Among the schedules that an individual debtor will file is a schedule of "exempt" property. The Bankruptcy Code allows an individual debtor (4) to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor's home state. 11 U.S.C. § 522(b). Many states have taken advantage of a provision in the Bankruptcy Code that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, the individual debtor has the option of choosing between a federal package of exemptions or the exemptions available under state law. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives. This is the point, where I take a deep breath and am glad I work in our marketing department -- the attorneys and paralegals prepare quite a bit of paperwork to assist each of their clients with seeking protection under Chapter 7 of the Bankruptcy Code. Fastforward -- The US Courts site reports, Between 21 and 40 days after the petition is filed, the case trustee will hold a meeting of creditors. During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b). It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. The Bankruptcy Code requires the trustee to ask the debtor questions at the meeting of creditors to ensure that the debtor is aware of the potential consequences of seeking a discharge in bankruptcy such as the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt. Some trustees provide written information on these topics at or before the meeting to ensure that the debtor is aware of this information. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the meeting of creditors. 11 U.S.C. § 341(c). Whew this was a long topic... time to move along to some lighter entries and focus on some bankruptcy myths, after all - they don't call Attorney Foster "mr debtbuster" for nothing...

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Posted in bankruptcy court , Chapter 7 Bankruptcy , The Federal Bankruptcy Code

Qualifying for Relief Under Chapter 7 of Bankruptcy Code

Happy June 2nd... Let's continue with learning about Chapter 7 of the Bankruptcy Code. The topic of the day... Who is eligible to file for Chapter 7 ? According to the US Courts website... you can be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). So who is not eligible ? An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court. This definition of eligibility is definitely written in "lawyer-speak"... so as part of Foster Law Office's Marketing Department, let's break it down... One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." Discharge is just a fancy word for "getting rid of"... So most individuals file for Chapter 7 bankruptcy to "get rid of" debt. Once, a debt has been "discharged" the individual is no longer liable. BUT (here is the other side)the right to discharge is NOT guaranteed - some debts are not discharged and this will not extinguish a lien on property. This topic is a complex one for sure. It is always best to consult with a licensed bankruptcy attorney as each asset, individual and situation is different. The process is quite complex and deadlines are crucial. Next topic we will tackle - how does filing for Chapter 7 work?? If you are considering filing for protection under Chapter 7 of the US Bankruptcy Code - contact Foster Law Offices to schedule a free consultation.

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Posted in Chapter 7 Bankruptcy Eligibility , Foster Law Offices

What is Chapter 7 Bankruptcy

It's June! Only 19 more days until it is officially summer AND we are kicking off our "Learn about Bankruptcy Month"... we are excited to provide you with some educational information, hopefully you are excited to learn a bit more about bankruptcy. Today's Topic - What is a Chapter 7 Bankruptcy? While the answer may vary depending on who you ask... we are going to take the safe road and give you the explanation provided to consumers on the website by the United States Court System, a site that is designed to provide you with information about the judicial branch of the US Government, click here to check it out. - A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. - Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets ( You can call a licensed bankruptcy attorney such as Foster Law Offices to assist you with determining which of your assets would be classified as non exempt)and uses the proceeds of such assets to pay creditors in accordance with the provisions of the Bankruptcy Code. - In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. This is the most basic definition of a Chapter 7 Bankruptcy, if you are looking for additional information you can visit our Chapter 7 Bankruptcy Page or click here to learn the differences between Chapter 7 and Chapter 13 bankruptcy protection.

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Posted in Chapter 11 Bankruptcy , Chapter 13 bankruptcy , Chapter 7 Bankruptcy , Foster Law Offices