Celebrities seem to have it all; fame, fortune, and a fantasy lifestyle. So how is it that some celebrities still file for bankruptcy? There are actually quite a few ways that celebrities can find themselves financially bankrupt. Overspending, cancelled contracts and trusting the wrong people are some easy ways for a famous person to find themselves in hot water.
Six-time Grammy Award winner Toni Braxton found herself among the financially troubled in September of last year. Braxton filed for her second bankruptcy in 2010 with outstanding debts ranging somewhere from $10 to $50 million. Considering Braxton had already filed for bankruptcy in 1998, many people wondered how she found herself in trouble once again. Toni Braxton faced a series of unfortunate events, which could happen to anyone, and they took a toll on her finances.
First, and foremost, many people don’t understand the recording industry. In a recent interview Braxton explained, “I sold more than 40 million records, yet my royalty’s were less than $2,000 dollars.” What many people don’t know is that “an artist makes 4 to 7 cents on the dollar for every album sold and they have to pay back $20 million to the label for all the money that was spent to create, promote and sell that album.”
Next, 43 year-old Braxton faced a series of health problems which forced her to cancel a series of Las Vegas shows. She began having chest pains in 2008, which was diagnosed as microvascular angina. Later that year, Braxton performed on “Dancing with the Stars” but had to miss the show finale due to a benign breast tumor. The medical bills piled up while her shows and appearances were cut, causing a pile up of debts and no way to pay for them.
Braxton will need to sell off some of her $1 to $10 million in assets to help pay back creditors. Some of those creditors include Cedars-Sinai Medical Center, the Internal Revenue Service and Neiman Marcus. Braxton had spent months trying to work with creditors on payment plans to avoid the bankruptcy, but after losing her $2.6 million Nevada home to foreclosure Braxton decided filing for bankruptcy would be the best option for her family.
Bankruptcy, for many people, is a means of working out their debts. Bankruptcy can provide relief from a stressful financial situation and create a manageable timeline for repaying your debts. If you’re considering filing for bankruptcy, please consult an experienced Rio Grand Valley bankruptcy lawyer.
Jeff Davis is the Owner of the Davis law firm, and a highly experienced Harlingen, McAllen, and Edinburg bankruptcy attorney. To find out more information about a Rio Grand Valley bankruptcy lawyer, please visit www.jeffdavislawfirm.com.