Famous People who filed Bankruptcy

Filing bankruptcy happens to people from all walks of life and although you may feel alone when life has beaten you up its important to remember that bankruptcy is a tool to help you get back on track. No matter how much you want to believe it sometimes bankruptcy is the best option and with the right legal counsel there are ways to keep your home, retirement accounts, life insurance policies and more. From rock stars to athletes to today’s millionaires, countless people file bankruptcy every year to re-organize their financial life. Some of the most famous bankruptcies on record include:

Willie Nelson

Willie Nelson is one of Country Music’s living legends with over 50 million records sold but even with all those gold records he was no stranger to debt. Well known as a big spender with a generous heart, and an entourage somewhat like MC Hammer’s Willie Nelson’s finances caught up to him in the late 90?s. In 1997, the government seized Nelson’s gold records, Texas ranch and bank accounts to pay off about $16.7 million in back taxes.

In true American fashion however Willie Nelson did a Taco Bell spokesperson side job and released a new album in honor of the IRS, titled “The IRS Tapes: Who Will Buy My Memories?” to raise funds and settle his debts.

Marvin Gaye

The hit singer of “I heard it Through the Grapevine” filed for bankruptcy in the 70’s after paying the divorce settlement for his first wife of 14 years, Anna Gordy. He continued to struggle, having tax and drug problems, and moved to Europe to avoid the Internal Revenue Service.

However bankruptcy never stopped Marvin Gaye from coming back and in the 1980?s released some of the most well-known songs in history including the Grammy winning “Sexual Healing”. In 1984 however Marvin Gaye’s life was cut short dying at the age 45. Three years later Marvin Gaye was induced into the Rock and Roll of Fame.

MC Hammer

Who can forget the baggy pants and dance moves which would make most people keel over in 30 seconds. The 90?s were full of glitz and gold and few can forget the famous Hammertime song by M.C. Hammer.

However along with outrageous parachute pants and dance moves M.C. Hammer’s rise to fame came with a crushing blow to his personal finances. Racking up some of the biggest musical hits at the time he also had an entourage (and payroll) to match.

M.C. Hammer reportedly paid over $500,000 a month to a staff of 300 people and in 1996, had accumulated $13.7 million of debt with only $9.6 million in assets. He filed for bankruptcy with debts that included $500,000 in attorney fees, $110,000 to his decorator and $100,000 to the IRS.

Meatloaf

Meatloaf has sold over 70 million records with his “Bat out of Hell” album charted for over nine years, making it one of the biggest selling albums of all time and on the VH1 list of 100 Greatest Artists of Hard Rock.

He fired his managers in 1981 after finding they were stealing money from him, and the managers retaliated by having Meatloaf’s assets frozen and suing him for breach of contract. Additionally, they spread all kinds of rumors about Meatloaf behaving violently and waving guns at people. Meatloaf finally gave up and filed bankruptcy, with $1.6 million of debts. Things started to look up when he found a new producer and recorded an album in 1986, but the album tracks all had a dance beat which didn’t pan out for Meatloaf, and he was forced to file bankruptcy again.

However bankruptcy never stopped Meatloaf and today he enjoys a solid following and continues to tour to sold out crowds across the world. Meatloaf has even enjoyed many TV and Movie roles over the past decade and recently was a cast member on “The Celebrity Apprentice”.

Toni Braxton

Toni Braxton, a grammy-winning R&B singer known for her sexy, sultry voice and hit songs such as “You’re Makin’ Me High” and “Un-Break My Heart” attempted to get out of her recording contract with LaFace Records in 1998 as she felt it was no longer fair. She filed a lawsuit however LaFace turned around and counter-sued her, forcing Braxton to file bankruptcy and spend most of 1998 dealing with legal issues.

Braxton was diagnosed with Lupus in 2009, and has been dealing with ongoing health issues since then. Braxton filed bankruptcy for the second time in 2010, claiming to owe up to $50 million, with a net worth of only $1 million to $10 million.

Cyndi Lauper

The “Girls Just Wanna Have Fun” hit singer has had an extremely successful recording career, including her “True Colors” album, which charted at number one. However Cyndi’s beginning was not quite as successful, with a first album release together with her original band, Blue Angels. The album was a flop, and to top it off her manger sued the Blue Angels for $80,000, forcing Lauper to file bankruptcy in 1980.

Cyndi Lauper’s Estimated Net Worth Today – $6 Million

Tom Petty

Tom Petty’s first albums were a smashing success with his band the Heartbreakers, although his bank account did not grow along with his fame. Record companies are infamous for restrictive recording contracts with conditions that keep even top selling artists in the poor house. When Tom Petty’s label, Shelter Records, was sold to MCA he jumped on the opportunity to declare himself a free agent. When MCA balked, Petty paid $500,000 out of his own pocket to record his next album and held it back as a bargaining chip against MCA. In 1979, he finally declared bankruptcy to gain more leverage in the legal dispute to get out his unfavorable recording contract. MCA ultimately gave in, allowing Petty out of his original contract and signing a new $3 million contract with him.

His new album, “Damn the Torpedoes” was finally released featuring “Don’t Do Me Like That” and “Refugee”, went certified double platinum, and made Tom Petty and the Heartbreakers into true rock and roll superstars.

Natalie Cole

After many successful years as a recording artist, Natalie Cole (the daughter of recording legend Nat King Cole) had a career pause and problems with drug addiction in the early 80’s. By 1985 she was doing much better, but still filed for bankruptcy protection in 1997.

Her career picked up again in the late 90’s, and she won the “Hitmaker Award” for the Songwriter’s Hall of Fame in 1999 . Natalie was diagnosed with Hepatitis C in 2008 and had a life saving kidney transplant but continues to record and inspire people around the world today.

Mike Tyson

Retired former heavyweight boxing champion Mike Tyson won the WBC title as a 20 year old and quickly became one of the most famous athletes in the world.

He went on to have a very successful boxing career, becoming known for his ferocious style in the ring and controversial behavior outside of the ring. Although Tyson received over $30 million for several fights and a career income estimated at $300 million, he filed bankruptcy in 2003.

He had a very difficult and public  divorce from ex-wife Robin Givens blaming his financial situation on excessive spending on mansions and expensive cars. Tyson also blamed bad financial advisors and embezzlement as other causes for his bankruptcy.

Mike Tyson’s Estimated Net Worth today is under $5 million.

Walt Disney

Walt Disney started a company named Laugh-O-Gram in 1920 to produce his first animated fairy tales. Disney started assembling his team of animators, and legend says that the office space was infested with mice, including one mouse that had a lot of personality and received a special nickname of– Mickey.

His New York-based financial backers ended up going broke, and Disney could no longer cover his payroll or his debts. The company filed for bankruptcy protection, and Disney scraped together the funds to take a bus to Hollywood. Once he arrived, he put his own name on a new production company, and invented his newest animated character.

The Walt Disney Co. today is one of the largest companies in the world with a market value of almost $80 Billion!

Marion Jones

Marion Jones, an Olympic sprinter with 5 medals and endorsement deals worth millions of dollars has been fighting off financial troubles for some time now. After numerous anti-doping and other agencies made allegations against her regarding steroid use, Jones missed many meets and spent substantial amounts of money on attorneys to fight the allegations.

Jones also admits her own spending habits to maintain a certain “lifestyle” have forced her deep into debt. Jones has had to sell off some real estate assets, including a $2.5 million mansion she lost to foreclosure, to settle some of her debts and try to avoid bankruptcy.

Kim Basinger

In 1993, Oscar-winning actress Kim Basinger was ordered to pay over $8 million to Main Line Pictures, after she was sued for breach of contract. She was charged with backing out of a verbal agreement to star in the film “Boxing Helena.” Basinger filed bankruptcy, and the court’s decision was later reversed during an appeal.

Ed McMahon

Apparently, the real estate foreclosure crisis affected celebrities too. The legendary Johnny Carson sidekick Ed McMahon, recently deceased, had to file bankruptcy when he came up short $644,000 on the payments for his $4.8 million home loan, and the lender filed a default notice on McMahon’s Beverly Hills mansion.

Gary Coleman

Gary Coleman, former child star of the sitcom “Diff’rent Strokes” suffered financial problems due to lifelong kidney issues and poor money management. He also had to pay a settlement due to a 1993 lawsuit. The star had earned $70,000 for each episode of the show, but in 1999 had to file for bankruptcy. In 2009, he was still struggling financially, with $72,000 of debts and an accusation that the parents who adopted him had robbed his estate of approximately $1 million.

Abe Lincoln

Abe Lincoln was the nation’s 16th President. He was forced into bankruptcy in 1833, due to a poorly performing retail business and back payments of debt. Lincoln lost his last two assets, his home and some surveying equipment, and spent 17 years paying back the rest of the money to all the friends who had lent him funds to start his business.

Larry King

Well-known talk show host and author Larry King filed for bankruptcy protection with $352,000 of debt. This was back in 1978 when his career was just beginning. He was less financially savvy then, but fortunately his career improved and seven years later, CNN debuted Larry King Live, the cable station’s longest-running show.

Anna Nicole Smith

The Former model and 1993 Playboy Playmate of the Year Anna Nicole Smith was charged in a sexual harassment lawsuit brought by an employee in 1996. She lost the suit and filed bankruptcy due to an $850,000 judgment stemming from the lawsuit, along with other debts. The star apparently misplaced millions of dollars in jewels, and among debts listed in the bankruptcy filing was a $265.63 gas bill. After Smith’s 89-year-old billionaire husband J. Howard Marshall died, a battle began between her and her husband’s family over his estate. The bankruptcy court got involved since any possible money from the Marshall estate would be considered as potential assets. A Los Angeles bankruptcy court awarded Smith almost $500 million from the Marshall estate in 2000. In 2001 a Texas court ruled that Smith was not entitled to anything, and ordered her to pay $1 million in legal costs.

Due to the conflicting judgments between California and Texas courts, the case went to the federal court. The decision to award Smith any money from the Marshall estate switched back and forth, with decisions overruled and a final Supreme Court decision unanimously decided in favor of Smith’s right to pursue a share of her husband’s estate in federal court. Since Anna Nicole’s death, the case has been continuing on, in an effort to receive funds for Anna Nicole’s infant daughter. Lawyers for Anna Nicole’s estate have requested an appeal, and in September, 2010, the U.S. Supreme Court agreed to hear the case again.

Donald Trump

The Donald has a famous hairstyle and even more famous reputation as a real estate magnate who enjoys the extravagant life. Along the way, Mr. Trump has had a few bankruptcies, involving his casinos – four, to be exact in 1991, 1992, 2004 and 2009. Fortunately, he has his TV show and the rest of his real estate empire to help him stay afloat financially.

Unofficial rumors are flying that Trump has his eye on the Presidency, and recent questions have been posed to him about his string of bankruptcies. Trump stated that chapter 11 corporate bankruptcy, or reorganization – was just a tool he used to negotiate his corporations’ debt deals. Trump pointed out in an interview that Henry Kravis and Carl Icahn, two great businessmen, have both filed corporate bankruptcy. Incidentally, each of Trump’s chapter 11 bankrupt corporations did in fact renegotiate their debt, and each corporation has gone on to become very successful.

Henry Ford

Henry Ford was a perfectionist who had a tough time producing enough cars to make a profit. He went broke and filed for bankruptcy in 1901, and reorganized his business several months later. He eventually left that business behind and finally got his car company production methods right by 1903, when he founded a new business that went on to become very successful, called the Ford Motor Company.

Sarah Ferguson

The original Fergie, Sarah Ferguson, may become the first royal family member to seek bankruptcy protection. With debts reportedly totaling just under $8 million, the Duchess of York was hoping to sell off family heirlooms on QVC to raise some money. She had previously attempted to raise money by selling access to information on her ex-husband to a reporter working undercover. The sale never took place and she says the whole thing was a huge misunderstanding, but also admits it was a huge lapse in judgment on her part.

Source: howtosavemoney.com

KEEPING YOUR CAR IN BANKRUPTCY

If you have a car loan, and want to obtain bankruptcy relief, and keep your car, you have several options.

If you file a chapter 7, you can reaffirm the debt. But this may not be your best option.

You may find that a better option is to file a chapter 13. You can propose a chapter 13 plan that pays your car loan, and possibly wipes out all other debts completely. Depending on your circumstances, such a chapter 13 plan may offer the following advantages:

- reduce the principal of your car loan down to market value of your car,

- reduce the interest rate on your car loan down to market interest rate,

- wipe out all other debts,

- stretch your payment out over 5 years.

But another advantage of such a plan is the option it gives you AFTER the court approves your plan. Let's say after your plan is approved, you lose your job, or your car develops mechanical problems. You may be able to return the car, and go back to the bankruptcy court, and ask the judge to modify your plan and reduce your monthly payments.

If you have a car loan, and want to learn more about your options in bankruptcy, please contact us.

EXEMPTIONS: KEEPING YOUR ASSETS IN BANKRUPTCY

In a chapter 7 bankruptcy, the court appoints a trustee who has authority to sell the assets of the debtor, and use the proceeds of the sale to pay some of the debtor’s debts. But as a practical matter, in most chapter 7 proceedings, nothing gets sold. That’s because under bankruptcy law, the debtor can “exempt” certain assets. Generally, the exemption law identifies an asset category, and also, specifies a dollar amount for that category. The debtor keeps the assets that fall within the category, so long as debtor’s equity in the assets in a particular category is less than the amount for that category. If the debtor’s equity in assets in the category exceeds the amount of exemption for that category, the trustee usually sells the assets, then pays any liens on the asset, then pays the debtor the amount of exemption. The trustee then disburses the rest of the funds among the creditors.

Understanding and using exemptions is critical to a successful bankruptcy. A skilled attorney must first evaluate debtor’s assets, then select an exemption strategy based on debtor’s future plans.

Let’s look at these two steps.

First, the debtor’s assets must be evaluated. Some assets, such as stocks, bonds, cash-value life insurance policies, and bank accounts are extremely easy to evaluate. Some assets, such as cars and homes, are a little more difficult, and require referring to reliable sources. Some assets, however, require legal analysis .For example, if a debtor has an interest in a trust, or a business, debtor’s attorney must carefully analyze the facts to come up with a fair value.  Making a mistake in this analysis can result in debtor losing valuable assets that she could otherwise keep and use.

After evaluating the assets, debtor’s attorney must look at the exemptions, analyze debtor’s long-term plans to choose an exemption scheme.

An exemption scheme must be chosen because California offers debtors two different schemes. At the risk of over-simplification, one scheme provides for a generous exemption in a debtor’s home. The other does not offer any exemption in debtor’s home, but provides for a smaller, but still generous exemption that can be applied to any category of assets – cash, stocks, cars, etc.

Depending upon debtor’s long range plan, an experienced attorney may advise debtor to take advantage of the generous home exemption, or the attorney may advise that debtor use the other exemption scheme to protect cars, businesses, cash, etc.

The exemption analysis does not just apply to chapter 7 cases. Bankruptcy laws require that in a chapter 13, debtors must pay their unsecured creditors an amount equal at least to what they would have received in a chapter 7. Therefore, a skilled bankruptcy attorney must conduct a thorough liquidation and exemption analysis before advising clients about chapter 13 plans.

If you want to have our attorneys evaluate your assets and conduct an in-depth exemption analysis, please contact us today for a free initial consultation.

Do you have gambling losses that you cannot afford to pay back?

Bankruptcy can sometimes help to discharge gambling debts. However, casinos and credit card companies often challenge the discharge of gambling debts by claiming fraud against the debtor.  These fraud claims are decided on a case by case basis and can be tricky.  You have to know the right questions to ask, the right documents to request and be familiar with the sometimes conflicting legal cases.  At the Fuller Law Firm, we know how to handle these cases.

Most recently, we stepped in as attorney for a client with large gambling debts who had tried to use the services of a high-volume, cut-rate bankruptcy practice.  His prior firm failed to properly defend the casino’s fraud claim and default was entered against the client.  We stepped in, got the default cleared and began to challenge the claim through discovery.  Ultimately, this claim settled for less than 2% of the total gambling debts.  While the facts of each case are different and results may vary, the knowledge base necessary to defend these cases is the same from case to case.

If you have gambling debts that you cannot pay, contact us today for a free consultation.Does the bankruptcy attorney that you have or are considering have experience fighting these kinds of cases?  The Fuller Law Firm has successfully defended fraud claims related to gambling debts and obtained the discharge of hundreds of thousands of dollars of gambling debts.

Heritage Pacific Financial

If you search Heritage Pacific Financial on the internet, you will get many hits that talk about complaints against Heritage Pacific. Many of the hits allege that Heritage Pacific is engaged in a scam or engages in abusive and unfair debt collection practices that prey upon people who cannot afford to fight back.  But what can you do about it?

Heritage Pacific typically alleges that the borrower engaged in mortgage fraud.  By alleging fraud, Heritage Pacific can potentially get around anti-deficiency laws after a home is foreclosed.  Also, if a borrower files for bankruptcy, the fraud allegations potentially can prevent the debt from being discharged in bankruptcy.

However, in the litigation that we have handled and in many other cases of which we are aware, Heritage Pacific is unable to prove its cases.  These cases are often defensible.

Heritage Pacific buys this debt from the original lenders and, therefore, has a problem producing any witnesses who can testify from personal knowledge regarding the loan application process.  Also, due to the sheer volume of fraud lawsuits it has brought, Heritage Pacific appears to have had a problem adequately investigating its cases.   It relies on cookie-cutter allegations of fraud.  In addition, in cases that we are aware of, there is often evidence of wrongdoing by brokers and lenders involved, rather than the borrower.  Yet Heritage Pacific seemingly ignores any facts that vary from its narrative of borrower misconduct.

Although these cases are defensible, if you do not know what you are doing, you might end up with a bad result.   Not only might you end up with a money judgment against you that cannot be discharged in bankruptcy, but you will also have a judgment of fraud on your record.  Heritage Pacific’s allegations threaten not only your pocketbook, but also your good name.

Our law firm has successfully litigated against Heritage Pacific.  We are already familiar with the practices of Heritage Pacific.    Also, our firm has experience litigating in both State and Federal Court, including Bankruptcy Court.  Many lawyers practice in one or the other, but not both.  Each of these Courts has different procedures, with which we are already familiar.   If you are on a limited budget, it is especially important that you not pay another lawyer to reinvent the wheel.

If you are being sued by Heritage Pacific Financial, let us put our experience to work for you.