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Celebrities Who Were in Debt

Celebrities Who Were In Debt & Dug Themselves Out

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Celebrities Aren’t Immune From Financial Woes

We’ve all heard the stories of celebrities who have blown their fortunes and gone bankrupt. It’s true — even celebrities find themselves buried under a mountain of debt. If they can climb out of their financial problems, then it certainly means we non-celebrities can buckle down and conquer our debt as well!

Here are some of the celebrities who were in serious financial trouble and got out of it:

1. Allen Iverson: Jewelry

Being a celebrity comes with a lot of perks. You get to live in the lap of luxury, travel the world, and be adored by millions of fans. There’s just one catch — it comes with a lot of pressure. This was the case for Allen Iverson, who earned around $200 million during his career but filed for bankruptcy in 2012. The main culprit? His love for jewelry. He owed $859,000 to a single jeweler when he declared bankruptcy. Luckily, Reebok stacked up a $32 million trust fund for him, which he used to pay off his debts.

2. Kim Basinger: Bad Movie Investments

Kim Basinger is one of the most famous celebrities to have ever found themselves in debt. The award-winning actress and producer had a string of hits throughout the 80s, but by 1993, she found herself in several lawsuits that forced her to declare bankruptcy. One interesting case was against director Uli Edel. During the case, she was ordered to pay $8 million after she backed out of his film Boxing Helena. He later overturned the judgment on appeal. In the end, Basinger’s career survived, and she continues to be a successful Hollywood star.

3. Toni Braxton: Addiction to Mansions

As someone who had an addiction to buying mansions, Toni Braxton declared bankruptcy in 2010 after amassing $50 million in debt. This included money she owed on a lavish mansion she just couldn’t afford anymore. Her case was complicated by a diagnosis of Lupus that led to the cancellation of a Las Vegas show that would have greatly improved her finances. She completed her settlement four years later in 2014, but the singer ended up spending $3 million on a new estate just six months later, starting the cycle of debt all over again.

Thankfully, she can afford such things again as she released an album in 2020 and stars in the reality TV show “Braxton Family Values.”

4. 50 Cent: Lawsuits and Mismanagement of Wealth

Celebrities Who Were in Debt

As one of the biggest names in hip-hop, 50 Cent has basically always been the picture of success. But behind the glitz and glamour of his celebrity lifestyle, 50 Cent has also endured some hard times. He was reportedly over $32 million in debt just a few years ago due to multiple lawsuits and unpaid child support payments.

Despite this setback, 50 Cent managed to bounce back. In 2018, he had reportedly made millions of dollars by investing in Bitcoin. Through his repayment plan and smart financial decisions, 50 Cent could recover from his debt and continue living a high life. Today, he’s an influential figure in the music industry and is a role model for people who have fallen on hard times but are determined to bounce back.

5. Da Brat: Assault Conviction

Da Brat, best known for her platinum-selling album “Funkdafied” in 1994, declared bankruptcy in August 2018. She’s reportedly over $7 million in debt, with assets totaling only $108,000. The majority of her financial problems can be traced back to a 2007 assault, for which she was found guilty and sentenced to nearly two years in prison. A judge also ordered her to pay the victim $6.4 million in restitution, but after a year of refusing to pay, she now owes an additional million.

To get out of debt, she started liquidating some of her assets, including her 1999 Mercedes, 2014 BMW, and a2016 Jeep Wrangler to slowly pay off her debt.

6. Mike Tyson: Luxuries and Siberian Tigers

With a reputation as one of the most fearsome and successful boxers of all time, Mike Tyson was certainly living the high life back in the 1980s and 1990s. Spending millions on flashy jewelry, luxurious mansions, exotic cars, and even his own pack of wild Siberian tigers, it’s no wonder that he eventually found himself massively in debt. But despite this financial situation, Tyson managed to turn his fortunes around by working hard and focusing on his career. This allowed him to pay off most of his debt and put him back on solid financial footing.

7. Lindsay Lohan: Expensive London Flat

When it comes to celebrities who have dealt with financial difficulties, few can match the case of Lindsay Lohan. Known for her roles in popular films like Mean Girls and Freaky Friday, Lindsay was once one of Hollywood’s hottest stars. However, she made some costly missteps that nearly left her bankrupt. One such misstep was her squandering of hundreds of thousands of dollars on a luxury apartment in London. The flat came with a hefty price tag of 78,000 pounds per month, or roughly $103,000. Despite her vast wealth and celebrity status, Lindsay couldn’t keep up with the steep rent payments and eventually found herself in bankruptcy court.

Fortunately for Lindsay, she has managed to turn things around over the years by taking on more responsible projects like her recent venture with Netflix.

8. Debbie Reynolds: Faulty Investment in Hotel and Casino

Debbie Reynolds found herself in debt after investing in the Paddlewheel Hotel and Casino in the early 1990s. The hotel was renamed Debbie Reynolds’ Hollywood Hotel, and she partnered with Jackpot Enterprises for the casino portion of the business. However, the partnership meant that Reynolds and her team would not receive any of the profits from the casino. They tried to sell timeshares to generate revenue, but it wasn’t enough. The hotel began to lose money, and Reynolds was eventually forced to declare bankruptcy.

Her one million dollar bank loan that she used to finance the project was forgiven, but Reynolds was still left with a large debt. She eventually managed to sell the property and paid off her debts, but it was a difficult road for the legendary actress. She died in 2016, but her legacy inspires many people who have faced financial troubles.

9. Dionne Warwick: Shopping Spree

Known for her hit songs and powerhouse vocals, Dionne Warwick has been a leading figure in the music industry for decades. She has won five Grammys, sold millions of albums, and earned a steady income through her successful concert career. Despite her incredible success, however, Dionne found herself facing serious financial troubles in 2013. Due to poor money management and an addiction to shopping, she had racked up tens of thousands in credit card debt and was on the brink of bankruptcy.

Nevertheless, Dionne remained optimistic about her future. She acknowledged her mistakes and vowed to get back on track with better financial planning. And despite the challenges she faced, she continued to tour both nationally and internationally, showing that even celebrities can fall into debt, but also have the strength to bounce back from it.

10. Nicolas Cage: Squandered on Private Island and Shrunken Pygmy Heads

Nicolas Cage is one of the most well-known Hollywood actors today. He’s also well-known for his eccentric spending habits and large debt. He’s spent money on everything from shrunken pygmy heads to a dinosaur skull to even a private island. While Cage has always been able to find work, his financial situation led to him declaring bankruptcy in 2007.

Despite his overwhelming debt, Cage remained unbothered by the situation and continued to work hard and pursue his passions. He was eventually able to overcome his debts and emerge on top.

Conclusion

Okay, so maybe you didn’t shell out hundreds of thousands of dollars on mansions or millions on a private island. Most of us haven’t even seen that amount of money in our dreams. In the end, though, this is a story of hope. If people had debts beyond your wildest imagination and they got out of it, then we’re confident you can do the same with a little less. With patience and perseverance, you can turn mountains of debt into molehills and get the satisfaction of paying off that very last cent. You’ve got this!

About the Author

Rick Munster

Rick Munster

Rick Munster is a personal finance expert and author with over 21 years of experience in the credit counseling industry. He currently serves on the board of directors for the Financial Counseling Association of America and has written over 200 articles on personal finance. Rick's expertise has been recognized by several prominent online organizations, which have quoted him on issues related to credit counseling, debt management, and financial education. With more than 20 years of experience at Money Fit, a non-profit credit counseling organization, Rick has established himself as a trusted authority in the field of personal finance.
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Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
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Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

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The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
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Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

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Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).