Over the past few years, individuals from every walk of life have been impacted in some way. Celebrities, wall street executives and average Americans may not have much in common, but the economic recession has caused financial problems for each of them. For many, the answer to those problems is the same, too: bankruptcy.
Average Americans are not the only ones who have turned to bankruptcy for debt relief in recent years. In fact, celebrities find themselves facing bankruptcy for similar reasons as everyday Americans: failed investments, overspending and divorce.
When it comes to investments gone bad, Kevin Bacon and Kyra Sedgwick can relate to the thousands of Americans who trusted Bernie Madoff. The ponzi scheme that destroyed the retirement plans of many in our communities also affected the famous couple. Bacon and Sedgwick are reported to have lost millions of dollars in personal investments to Madoff. Kevin Bacon told one magazine, “I need to work for obvious reasons.” Sounds a lot like many of our neighbors who are facing bankruptcy.
Bono is another celebrity who lost a significant amount of money to a poor investment. The singer invested in Palm when the company was a leader in smart-phone technology. Unfortunately for Bono, Apple’s iPhone and others in the market overwhelmed Palm. The stock Bono purchased in Palm fell drastically and he reportedly lost $140 million.
Another common cause for bankruptcy is high credit card debt and overspending. Few are more familiar with this issue than Nicolas Cage. The famous actor is reported to have spent $30 million on real estate alone. He also purchased 22 cars, 47 pieces of artwork and a dinosaur skull. While those purchases are on a very different scale than average Americans, the result was the same. He was forced to sell much of his property, faced foreclosure and has lost much of his money.
The last common cause of bankruptcy that we will examine is divorce. Unfortunately, many people have discovered that ending a marriage can be an expensive proposition. Dividing assets and debts, trying to sell a house and resolving the other financial matters in divorce can leave both spouses with significantly less than they are accustomed to. While Madonna did not have to file for bankruptcy after her divorce, she was left with $75 million less than she started with.
These are not the only celebrities who have faced financial troubles in the past few years, but they do illustrate an important fact: The economic recession has impacted everyone in our country. And there is no shame in admitting your own financial difficulties. For many, celebrities and non-celebs alike, bankruptcy can be an important debt relief tool.
Source: The Street, “10 Celebrities Who Lost Big Financially,” Jason Notte, 4 March 2011