Written by: Nikitas Tsoukalis, Key Credit Repair
Being a celebrity isn’t for everyone. Yes, with it comes fame and fortune, but also attention and temptation. And sometimes this temptation can get the best of a person, taking him or her from hero to zero just as fast as they rose to the top.
From blown fortunes to horrible financial advice to terrible money mismanagement, here’s a look at the top five celebrities who have gone through bankruptcy:
Stop. It’s (not) hammer time!
At the peak of his fame in the late 1980s and early 1990s, MC Hammer was a hip-hop household name. He had swag (the pants). He had the hits (“Can’t Touch This” and “Too Legit to Quit). And in total, he sold some 50 million records worldwide. Unfortunately, Mr. Hammer saw his career and his estimated $33 million fortune all come crashing down thanks to reckless spending on personal luxuries and excessive spending to support his friends and family.
Hammer employed a 200-person entourage for $200,000 a month. He owned a $30-million mansion. And it took him six years to blow through it all, as he found himself in bankruptcy court in 1996 claiming $9.6 million in assets and $13.7 million in debt. Ouch. Bye bye house and lavish lifestyle.
Hammer eventually rebounded, repairing his credit score, but he’s still the butt of jokes among the rap world for his misfortune. To add insult to injury, he was even socked with a $780,000 bill in back taxes from the IRS in 2011. Today, Hammer lives a much more humble lifestyle, in a ranch home in Tracy, California, with his wife of nearly 30 years and five children.
L.T. was a 10-time Pro Bowler. He won two Super Bowls over the course of an extremely successful NFL career. But as vicious as he was on the football field, he was incredibly dumb off of it. He was into drugs (Twice he tested positive for cocaine, and he has admitted to dropping $10,000 per day on drugs in the peak of his using days.), he was into girls and prostitutes, and he made some horrible business decisions to boot.
How horrible? How about late in his playing career, when he started and built a company up to be worth about $10 million. That is, until it crashed and went completely broke. He didn’t do himself any favors in 1990 either, when he filed a false tax return for which he was eventually busted. (Note to everyone – don’t mess with the IRS.)
Amazingly, despite all these financial issues and failed business ventures, it took until 2009 for L.T. to file for bankruptcy protection.
Anna Nicole Smith
As a Playboy model, Anna Nicole Smith used to be one of the most desired women on the face of the Earth. She even struck the fancy of billionaire J. Howard Marshall, so much so that the two wed in the mid-’90s. But Anna’s world then came crashing down a mere 14 months later when Marshall passed away. Smith, who was expecting to inherit like a bandit, received nothing.
Talk about a gut punch.
When married, Smith was living lavishly on a $400 million budget. But when Marshall died, that went to $0. To make matters even worse, an ex-maid sued Smith to the tune of $850,000 for sexual harassment. Dang. Needless to say, Anna Nicole Smith filed for bankruptcy and never seemed to have recovered from the blow. She led a very up-and-down life until her death in 2006.
Lavish mansions. Expensive cars. Bengal tigers (Yes, just like in The Hangover.). Drugs. Women. Alcohol.
That was just a snippet of Mike Tyson’s spending habits between 1985 and his retirement, when he earned between $300 and $400 million. In 2003, he filed for bankruptcy protection in New York City, claiming about $23 million in debts.
Tyson appears to be in a much happier place today, nearly 11 years after filing for bankruptcy. While his FICO score hasn’t evidently quite rebounded yet, he appeared in all three Hangover movies as himself, in which he poked fun at a lifetime worth of poor spending habits (e.g., the Bengal tiger). While he says he’s living “paycheck to paycheck,” Tyson claims to have also found happiness with his new wife. Maybe that’s the best type of credit repair out there!
Perhaps Tyson is the living, breathing example that with “mo money” come “mo problems.”
The iconic CNN talk show host’s bankruptcy wasn’t extremely significant in terms of monetary amount. But it was notable in terms of a rags to riches adventure for King, who filed for bankruptcy well before his long-appointed CNN gig.
The story goes that a young King, who was working as a Miami radio host in the 1960s, allegedly attempted to steal $5,000 from a business associate to make ends meet. He got busted, and while charges were dropped, King was fired from his radio gig and didn’t find work in journalism again for some four years. He declared bankruptcy in 1978 to the debt of $352,000. Things were quick to look up for Larry King though, as that same year, he began is run on CNN. I think we can safely assume his credit score is fine now, as he’s a broadcast television icon.