These 10 Celebrities Filed For Bankruptcy — Here's How It Went For Them
Photo Credit: John Sciulli / Frazer Harrison / Dimitrios Kambouris
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These 10 Celebrities Filed For Bankruptcy — Here's How It Went For Them

In January 2022, AfroTech reported on the curious bankruptcy case of one Trick Daddy.

At the time, we reported that the “Nann” rapper — who hit a world of a mess when he got stung by the BeyHive after snarking that its Queen, Beyoncé, couldn’t sing — was in default on his Chapter 13 filing.

Court documents obtained by Radar Online reveal that Trick Daddy owes nearly $23,000 to bring his Chapter 13 filing current. He has 45 days to cure the debt, or he will be deemed in default. If he fails to come up with the nearly $23,000 owed to the courts, his bankruptcy will be discharged, and collection efforts can begin anew on his assets.

What’s more, the radio host also revealed to the courts that he has more than $800,000 in debts, but less than $400,000 in assets.

Because of his precarious financial position, Trick Daddy filed what’s called Chapter 13 bankruptcy, which is when your debits and credits are given to a trustee, who then “balances your budget” in a manner of speaking. Once your trustee reorganizes your debts into a reasonable payment plan, you make the payments every month to the court until the debt is satisfied. You are then discharged from bankruptcy, with all your debts satisfied.

Other types of bankruptcy include Chapter 7 (which is a personal bankruptcy option that’s also known as liquidation), and Chapter 11 (which is commonly filed by businesses for asset reorganization purposes).

And while many people incorrectly believe that filing for bankruptcy is tantamount to perpetual financial ruin, there are plenty of celebrities who file for it who bounce back stronger than ever before.

Let’s take a look at some other celebrities who filed the “big B,” and how it worked out for them.

Toni Braxton

Photo Credit: Frazer Harrison

According to Cheatsheet, her first filing came in January 1998, when she filed for Chapter 7 to get out of her contract with LaFace/Arista. In a nutshell, Braxton was recording demos for other artists, yet her predatory contract wasn’t compensating her appropriately for her efforts. Her lawyers later revealed to The Los Angeles Times that Toni was only receiving 33 cents per album sold, which meant it was impossible for her to make any sort of substantive money off of her record sales. When LaFace failed to meet the terms of negotiation, Toni filed for bankruptcy to get out of the contract.

In her 2017 memoir, which was released after her 10-year gag order expired, Toni went into more details about what really went on: she had to pay LaFace back for all the money they’d shelled out for her career, which is why many of her royalty checks — which should have been in the millions — were, instead, in the thousands; at one point, her royalty checks were less than $2,000 despite generating more than $170 million in sales. Ultimately, Braxton revealed that LaFace/Arista settled with her for more than $20 million.

George Foreman

Photo Credit: Roger Kisby

According to Celebrity Net Worth, a series of bad investments left George Foreman with no other choice but to file for bankruptcy.

“Foreman was sitting pretty on a pile of money he had made from his historic matches. Unfortunately by 1987 nearly all of that $5 million fortune from boxing was gone through bad investments and an overly extravagant lifestyle,” the outlet stated.

That’s when he reportedly came out of retirement to fight again and licensed his name for use on a series of grillers that we all know and love as the George Foreman Grill. At the time he set up the deal in 1994, CNBC reports that he was entitled to 45 percent of the sales, but had no guaranteed money. But the grills took off — at one point, Sportscasting reports that Foreman was taking home $11 million per appearance on television to promote the grill. So, in 1999, Spectrum Brands — the manufacturer of the grill — paid Foreman a lump sum of $137.5 million in cash and stocks for the right to use his likeness and name in perpetuity. Today, Foreman has a net worth of $300 million, as AfroTech previously reported.

Marvin Gaye

Photo Credit: Gie Knaeps

Not even the legends are safe from bankruptcy filings. In 1976, Marvin Gaye filed for bankruptcy after it was revealed he owed his ex-wife more than $600,000 in back alimony, according to CNBC. But six years later, Gaye bounced back with “Sexual Healing,” the biggest single of his career.

Dionne Warwick

Photo Credit: Neilson Barnard

In 1991, Dionne Warwick was left with just over $1,000 in cash after decades of a successful musical career.

“Warwick, 72, made hits out of many Burt Bacharach and Hal David songs, and won five Grammys in a 50-year career,” CNN reported in 2013. “The singer is down her last $1,000 in cash and only owns furniture and clothing worth $1,500, according to the Chapter 7 filing in New Jersey.”

CNN reported that at the time of Dionne’s filing, she owed $7 million in a federal tax bill, more than $3 million to the state of California in “franchise taxes” (which is an annual fee assessed by the state of California based on a business’s net worth, per NoLo, and is assessed at a rate of 1.5 percent of the business’s total income), and another $500,000 in lawyer’s and manager’s fees.

Today, she’s still on the road to recovery but has a net worth of $500,000, according to Celebrity Net Worth.

Curtis '50 Cent' Jackson

Photo Credit: JC Olivera

As AfroTech previously reported, at the height of his fame, Curtis “50 Cent” Jackson had a net worth of $260 million. But in 2015, he filed for Chapter 11 bankruptcy to reorganize his business assets, which came shortly after he faced a lawsuit.

According to The Guardian, he then entered into a five-year plan to settle $22 million in debts and paid it off in 2017 (a few years earlier than he was required to do). Today, Jackson has an estimated net worth of $40 million, and he’s one of the most sought-after producers in Hollywood.

MC Hammer

Photo Credit: Dimitrios Kambouris

MC Hammer was once one of the most popular rappers on the music scene. In the 1990s, per The Mirror, he accrued more than $70 million in wealth. But, as with most people who get a sudden rush of money with no financial skills to manage it, he spent all of it so lavishly (he even bought a gold hot tub!) that he went from having a $70 million surplus to a $13 million deficit, CheatSheet reports. As a result, he filed for bankruptcy.

Today, according to Celebrity Net Worth, he has a net worth of $2 million.

Gary Coleman

Photo Credit: Kevin Winter

Time Magazine has all the details on this tragic story. Gary Coleman was once the highest-paid actor on television thanks to his hugely popular role on “Diff’rent Strokes.” The Los Angeles Times estimates that Coleman made $64,000 per week and reportedly made more than $18 million “during his TV heyday.”

But in 1999, Gary Coleman filed for bankruptcy with a $72,000 debt after it was revealed that he had a series of medical issues — and that his adoptive parents misappropriated his funds.

Unfortunately, Coleman passed away at the age of 42 and was still drowning in debt. However, TIME said it well: “Despite the considerable financial troubles he faced during the latter portion of his life, Coleman will always be remembered for uttering that iconic, million-dollar question: ‘Whatchoo talkin’ ’bout, Willis?'”

Mike Tyson

Photo Credit: Joe Scarnici

When he was in the ring, “Iron Mike” Tyson was nearly indomitable. But in 2003, according to Sportscasting, Tyson filed for bankruptcy with a $23 million debt, despite making over $400 million in the past 20 years. Today, Tyson has a net worth of $10 million, per Celebrity Net Worth, and as AfroTech previously reported, he’s started to invest wisely in a series of businesses — including many in the cannabis sector.

Allen Iverson

Photo Credit: Paras Griffin

Allen Iverson retired from the NBA court in 2010 with $200 million in his pocket, per Clutchpoints. Two years later, it was all gone. When a jeweler in Georgia demanded a $900,000 payment, he filed for bankruptcy. But ultimately, he signed a deal with Reebok for $800,000 per year, plus a $32 million trust which he will have access to in 2030. As AfroTech previously reported, he also began investing his money wisely in a series of businesses — including in NFTs.

Sinbad

Photo Credit: John Sciulli

In May 2013, the legendary comedian Sinbad filed for Chapter 13 bankruptcy, claiming he owed more than $11 million in tax debt between the IRS and the California taxing authority. According to The Huffington Post, he was “upside-down” despite making $16,000 a month in a salary and having $131,000 in assets. Today, he has an estimated net worth of $4 million, according to Celebrity Net Worth.