Tax man troubles. Bad investments. Shady financial advisors. Lavish spending. These are some of the pitfalls that lead the rich and famous to file for bankruptcy.
Most famous folks end up filing Chapter 11 bankruptcy, a much less common form (7,735 filings in 2018, compared with 480,933 for Chapter 7 and 290,566 for Chapter 13). But some of their reasons for filing mirror the top reasons that regular folks file for bankruptcy — frightening medical problems, job loss, credit debt or divorce — just amped up to celebrity-size proportions.
So while we might scratch our heads wondering how someone can go from having $30 million in the bank to broke, there are lessons to be learned from famous people who have gone down that path.
“In my experience, the more money, the more problems,” said Michael Bovee, co-founder of debt relief company Resolve. “It means higher expenses, keeping up with the Joneses, the bigger house, the bigger house payments, the more expensive car.”