Three Insanely Rich People Who Filed Bankruptcy
Chapter 7 and Chapter 13 bankruptcy are not just for people who are at the end of their financial ropes. Frequently, due to misfortune, overspending, or a combination of both these things, people with substantial means also file bankruptcy. So, this filing does clearly not indicate failure. It simply means that the family was a victim of overwhelming circumstances, most or all of which were beyond their control.
All the people on this list worked with a bankruptcy attorney to eliminate debt, and a Chicago bankruptcy lawyer can do the same thing for your family. Additionally, bankruptcy also prevents creditors from taking adverse action, such as repossession or foreclosure. Finally, bankruptcy also protects your key assets, such as your home and retirement account.
Donald Trump
Before he was President, Trump’s companies filed bankruptcy four times. He was only personally liable on these debts in one instance. Business downturns in the gaming and casino industry, as opposed to Trump’s personal decisions, substantially caused these bankruptcies. However, since his name was on the documents, the future President was at least partially responsible.
These bankruptcies were Chapter 11 reorganizations. Frequently, Chapter 11 is a good option for struggling businesses. It’s certainly a better option than the alternative, which is usually liquidation. This option always hurts stakeholders and their families. Commonly, liquidation does not benefit creditors either. Instead of being repaid fully over time, they must often settle for pennies on the dollar.
Personal bankruptcy is much the same way. Chapter 7 and Chapter 13 give people control over their own finances. The only other option might be doing nothing and watching the situation deteriorate even further.
Burt Reynolds
Reynolds’ acting career had a very long arc and a very short peak. Although his commercial appeal began to decline after the mid 1980s, Reynolds continued spending extravagantly. His purchases included a sprawling Florida mansion that he could not really afford. After an expensive divorce from actress Loni Anderson, Reynolds filed bankruptcy in 1996. Unfortunately, his overspending continued and he filed bankruptcy again in 2011. At that time, his mortgage company said Reynolds was $1.2 million behind on payments to his “downsized” home in Hobe Sound, Florida.
As this saga shows, bankruptcy gives honest yet unfortunate debtors a fresh start. What they do with that fresh start is largely up to them. Nevertheless, Reynolds was unfazed. A few years before his 2018 death, Reynolds said he’d wished he had “spent more money and had a lot more fun.”
Wayne Newton
In 1983, Newton made the Guinness Book of World Records as the world’s highest-paid entertainer. Roughly a decade later, he was in bankruptcy court. What on earth happened?
Like many investors, Newton borrowed money to acquire new assets. Smart investors hardly ever use their own money in these situations. Newton also ran up a rather large tax bill, and income taxes are only dischargeable in certain situations.
Excess debt can crush anyone. For example, if your mortgage payment exceeds a third of your income, making monthly payments is often a problem. Bankruptcy helps people manage credit responsibly.
Reach Out to Effective Lawyers
You can learn a lot from celebrities, even if they declare bankruptcy. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Convenient payment plans are available.
Resource:
politifact.com/truth-o-meter/statements/2015/sep/21/carly-fiorina/trumps-four-bankruptcies/
/does-bankruptcy-take-care-of-back-taxes/
