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Famous Bankruptcies

Even Legends Go Bankrupt: 9 Icons Who Overcame Financial Ruin

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These historical and pop culture figures prove bankruptcy isn’t the end — it’s sometimes the beginning of a new chapter.

Correction Notice:

CORRECTION (February 12th, 2025): A previous version of this article erroneously included actor Nicolas Cage among celebrities who had filed for bankruptcy. Mr. Cage has never declared bankruptcy. We have removed any reference to Mr. Cage from this article. We apologize for the error.

1. Abraham Lincoln

Abraham Lincoln

Before he became president, Abraham Lincoln co-owned a struggling general store with a partner in New Salem, Illinois. Unfortunately, the business struggled from the start and eventually failed. When his partner passed away, Lincoln found himself responsible for the full extent of the business’s debts. At the time, bankruptcy laws were limited and harsh — there was no such thing as a fresh start through formal discharge. Instead, Lincoln was pursued by creditors for years. His personal property was seized, including his horse and surveying equipment. He spent nearly two decades repaying the debts through his earnings as a lawyer and public servant. Despite these hardships, Lincoln rose to become one of the most respected figures in American history. His journey from indebted shopkeeper to President of the United States is a powerful example that financial failure does not define a person’s future — it can be the foundation of a legacy built on integrity, perseverance, and public service. His resilience shows that even a future president can face financial ruin.

2. MC Hammer

At his peak, MC Hammer was worth more than $30 million. But his lavish lifestyle outpaced his income. In 1996, facing $13 million in debt, he filed for bankruptcy. He later reinvented himself as a minister and tech consultant — showing that financial comebacks are always possible.

3. Walt Disney

Before the magic kingdom, Walt Disney filed for bankruptcy after his first animation company, Laugh-O-Gram Studios, went under in 1923. He was cheated out of a distribution deal and couldn’t pay his staff. From that failure, he went on to build one of the most recognizable brands in the world.

4. Mike Tyson

Mike Tyson earned more than $400 million during his boxing career — and lost nearly all of it. Lavish purchases, legal fees, and IRS debts led him to file for bankruptcy in 2003. Today, he remains a pop culture icon and example of personal reinvention.

5. Gary Busey

Gary Busey filed for Chapter 7 bankruptcy in 2012, listing debts of over $1 million and assets worth only $50,000. Despite his fame, mounting medical expenses and IRS debt contributed to his financial decline.

6. Meatloaf

In 1983, Meatloaf filed for bankruptcy after being sued by his songwriter for $80 million. Vocal issues and personal struggles added to his challenges. He later returned to music with renewed success.

7. Donald Trump (Business Bankruptcy Only)

Donald Trump

While Donald Trump has never filed for personal bankruptcy, several of his business ventures — particularly in the casino and hospitality industries — have sought Chapter 11 bankruptcy protection. These filings occurred between 1991 and 2009 and involved high-profile assets such as the Trump Taj Mahal and Trump Plaza Hotel. Chapter 11 allowed these businesses to restructure their debts and continue operating while renegotiating terms with creditors. Trump’s business bankruptcies have been widely covered in the media, sometimes critically, but they also underscore the role bankruptcy plays in corporate strategy. His example highlights the important distinction between business and personal filings. Like Abraham Lincoln, his experience helps destigmatize bankruptcy overall — especially as he went on to become both the 45th and 47th President of the United States. For many, his story is a reminder that financial challenges, whether personal or professional, do not have to end a career. In some cases, they serve as a stepping stone to even greater success.

8. Burt Reynolds

Hollywood icon Burt Reynolds filed for bankruptcy in 1996 with nearly $10 million in debt. A combination of poor investments, a high-profile divorce, and real estate losses contributed to his financial troubles.

9. Dave Ramsey

Now a leading voice in personal finance, Dave Ramsey filed for bankruptcy in 1988 after a failed real estate venture. He rebuilt his career by helping others learn from his mistakes — proving that recovery is always possible.

Final Thoughts

Bankruptcy can affect anyone — from presidents and athletes to entrepreneurs and entertainers. These stories serve as a reminder that financial setbacks don’t define your future.

There is life after bankruptcy. The most important chapter is the one you write next.

Disclaimer: This article is for educational purposes only and does not constitute legal or financial advice. Please consult a qualified professional for guidance specific to your circumstances. Additionally, this article does not pass judgment on any of the individuals mentioned. Its purpose is to emphasize that bankruptcy is not a moral failing and should not be a source of shame. Many have faced financial hardship — and recovered. You are not alone.

Related Articles

Explore more resources to help you make informed decisions:

Frequently Asked Questions About Famous Bankruptcy Filers

Has Donald Trump personally filed for bankruptcy?
No. Donald Trump has never filed for personal bankruptcy. However, several of his businesses have filed for Chapter 11 reorganization.

Did Abraham Lincoln really go bankrupt?
Yes. Abraham Lincoln was responsible for debts from a failed business in his 20s and had to repay creditors over many years.

What can we learn from famous bankruptcy filers?
That bankruptcy is not the end. Many people — including celebrities and leaders — rebuild stronger afterward.


About the Author

Picture of Rick Munster

Rick Munster

Rick Munster is a personal finance expert and author with over 23 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 published more than 250 articles on personal finance. Over the course of his long-standing career at Money Fit, a nonprofit credit counseling organization, Rick’s insights have been featured by several news outlets on topics such as credit counseling, debt management, and financial education.
Visit Rick Munster's Page
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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.”
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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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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* 

eHome Homebuyer Education Course: $99 per household** 

  • 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) 

Online Workshops: $49 per participant 

  • Rental, Fair Housing, Predatory Lending Post-Purchase, HECM Family Member  
  • Approximately 1 hour each 

Other Self-Guided Financial Literacy Webinars: $0 

  • Credit, budgeting, homelessness prevention, debt prevention 
  • Approximately 30-60 minutes each 

One-on-one COUNSELING Fees* 

Pre-purchase Home Buying, Renter Issues, Homelessness, and Fair Housing: $0  

Post-purchase Ownership and Maintenance, HOEPA or Financial Management $75/hr  

Reverse Mortgage/HECM Counseling with Required Certificate $200 per household†  

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 

**Household is an individual or a couple  
†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)