Former heavyweight champion Mike Tyson earned an estimated $400 million over two decades in the boxing ring; the late “King of Pop,” Michael Jackson reportedly accumulated $500 million in lifetime earnings before his death in 2009; and real estate mogul Donald Trump is estimated to have a net worth of $2.9 billion. Despite the staggering amounts that all three of these gentlemen are said to have earned, each one of them also shared the experience of having to file bankruptcy despite their incomes.
People are often astonished to learn that celebrities who command multi-million dollar salaries end up broke, but bad spending habits can force anybody, famous or not, to file Chapter 7 or Chapter 13 if they bite off more than they can chew. It is not uncommon for me to have clients who began spending more lavishly, took out extravagant loans after a raise at work or began making risky investments, only to suddenly find themselves in over their heads when they lose their jobs or have unexpected emergencies arise.
While many of us often tell ourselves that we would never find ourselves in a situation similar to those of famous people who are forced to file bankruptcy after accumulating a small fortune, the truth is that anybody can go broke when he or she does not manage money properly. Nobody can say for certain what the future holds financially, but the people who often avoid these troubles put extra income away specifically for unexpected costs.
Another lesson that we can take from celebrities who file bankruptcy is that Chapter 7 or Chapter 13 is also the best way to earn a fresh start when it seems that there are no other options. It is important, however, to work with a Maryland or Washington DC bankruptcy attorney who can ensure you do so properly, as another lesson we can learn from some famous filings is that there are consequences to not doing so. I will further discuss those mistakes on Friday.
Law Firm of Kevin D. Judd – Washington DC bankruptcy lawyer