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Famous Folks With Major Debt

Posted By:  |  February 19, 2014  |  0 Comment(s)

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It could seem like international fame would be the solution to all of life’s financial problems, but this isn’t always the case. A rich and famous lifestyle brings with it huge expenses for travel, publicity, and property – not to mentioned all the unnecessary clothing, jewelry and lavish parties – and some celebrities find themselves in need of debt relief after spending far more than they earn. Sometimes, in an attempt to increase their wealth, a celebrity will invest in what looks like a lucrative opportunity, but turns out to be an invitation to financial disaster. Here are three famous people who couldn’t balance the books and went from million dollar bankrolls to massive debt.

Aaron Carter: Don’t Make Me Sell My Dog!

In November of last year, Aaron Carter had to file for bankruptcy. Instead of a solid financial base, Carter’s rise to fame as a teenage singing sensation left him with a debt load of some $2.2 million, despite the income from his continuing career. Carter’s bankruptcy documents revealed that he owed $1,368,140 to the IRS and was carrying an AmEx balance of $31,166. The assets he claimed at the time came to a humble total of $8,232.16. The possessions listed included a Brietling watch worth $3750, a $500 flat screen TV, and some musical equipment, such as a guitar and microphone. Carter listed his dog, King, to be worth “zero,” but later revealed that he undervalued the pet. King is a purebred English bulldog and could sell for $1500; Carter fudged the numbers out of fear his creditors would force him to sell the dog.

Mike Tyson: The Bigger They Are…

Former heavyweight boxing champion Mike Tyson is estimated to have made $300 million from his boxing career. Known for his eccentric personality, Tyson spent his money frivolously on conspicuous luxuries like diamond jewelry, sprawling mansions, and even a pet tiger. He also ceded a hefty chunk of money to his ex-wife Robin Givens in their divorce settlement. He was a beast in the ring, but Mike was eventually laid low by a $27 million in debt that ended with bankruptcy in 2003. The former champ says that what little remains of his money belongs to the tax collectors, and that the process of settling his account with the IRS is ongoing over a decade after filing.

He does, however, seem to be making a bit of a comeback. He’s been a guest on multiple television programs and movies, has had a Broadway show about his life, and recently appeared on the open night of the Tonight Show with Jimmy Fallon.

Donald Trump: Huge Fortune, Huge Debt

On The Apprentice, Donald Trump seems like an unerring business prodigy with a nose for big money. While Trump consistently ranks in lists of the richest people in America, with a personal net worth in the billions of dollars, his fortune has come with significant debts. He filed for bankruptcy in 1991, 1992, and 2004, and in 2009 Trump Entertainment was forced to file bankruptcy for the fourth time for three of Trump’s Atlantic City casinos. This time the company was groaning under a massive debt of $1.74 billion.

A recent piece was written about Trump on BuzzFeed that gives a unique look into his life currently and his political aspirations.

These are certainly not the only examples of famous people who went from riches to rags. While fame can certainly be a gateway to massive wealth, it in no way guarantees financial security and it opens up the possibility of extreme amounts of debt unattainable by regular people with ordinary financial means. Although they’re different in proportion, the money problems of the super-rich often share the causes of those of the average American, and they show that you can only stay in control of your debt by keeping your income and your expenses in perspective.

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  • How important is it to you for a debt consolidation company to offer financial education resources?
  • Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
  • Negotiates with your creditors on your behalf.
  • Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
  • Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
  • Combines all your debts and creditors into one monthly payment.
  • Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
  • You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
  • Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
  • Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
  • Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
  • Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
  • Borrowers can receive funds from their loan within only a few days.

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