Why Bankruptcy Can Happen Even If You’re Rich
Have you ever wondered how big celebrities go bankrupt? Surely these people have enough money that they don’t need to worry about overwhelming debt. Are they just really bad with their money? From Willie Nelson to Michael Jackson to Mike Tyson, more than a few celebrities and other wealthy people have been in the news for filing bankruptcy. What is it that goes wrong in their finances when they have millions?
Monthly Expenses Are Too High
The biggest reason that wealthy people can go bankrupt is that their net worth is tied up in assets like property and investments. Their actual cash flow may not be enough to cover their very high monthly expenses. When they have multiple homes and vehicles to care for, staff like chefs, trainers, personal assistances, security, and more, plus a never-ending schedule of expensive travel – their monthly expenses can spiral out of control.
They Fell Out of Popularity
One thing that can plague celebrities and artists is the temporary nature of stardom. Stars who are wildly popular for a while could find themselves out of work the next year after a small social gaff or just the next big thing showing up. If celebrities didn’t save, invested too much in pricey assets like property, or continue to live as they have been, they can easily find themselves under a lot of debt.
They Got Bad Advice
Another thing that can happen to people with a lot of money is that they got bad advice on investments. When you have a lot to invest, it’s common for people to take bigger risks with those investments. That can lead to big losses if they got bad advice about investments, or simply if the market changes unexpectedly. And when you consider the fact that con artists target those with money, adding to the bad advice that wealthy people get, it is easy to see how they could lose big amounts in short periods of time.
Why Does This Matter to You?
Filing for bankruptcy carries a lot of stigma, and can often be seen as a sign that you are terrible with your money. People believe that those who file for bankruptcy are irresponsible and shouldn’t be given second chances. But when you consider why it is that even wealthy people can fall prey to life circumstances, it is easier to see bankruptcy for what it is: a tool that can help any person get their finances straightened out when life didn’t go as planned.
Bankruptcy is there for those who had all the best intentions, and even had good sense with their money, but unforeseen circumstances caused their budget to be completely ruined. Whether you are a celebrity with millions, or an Average Joe making enough to enjoy a quiet life, you’re still open to mistakes and emergencies that can flip your situation in a heartbeat.
What Happens During Bankruptcy to Celebrities?
Celebrities have the same type of bankruptcy at their disposal as we do. Either they will file to repay their debts over a period of a few years, or they will have allowable assets sold off to cover their debts. Just like the rest of us, their debts will be settled for a smaller amount than what is owed. This is how celebrities are able to bounce back after bankruptcy – they can get back to earning those millions once their debts are settled.
This may not seem like something that can happen to you, but it is. You’ll be able to get back to earning your living and using your income the way you want when your debts are settled. Call us for a free consultation to find out how it works at 212-244-2882.