Bankruptcy can happen to anyone

Many people who face financial difficulties often feel that they are the only one dealing with such problems. However, throughout the years, many famous and successful people have experienced similar troubles, and in some cases bankruptcy.

Perhaps the earliest case of a famous person having to file for bankruptcy to discharge their debts was Rembrandt Haremenszoon Van Rijn, the successful Dutch painter, who accumulated more debt than he could repay and therefore had to file for bankruptcy at the age of 50 in 1656. A lawyer supervised the sale of his assets for the next two years, which included many of his paintings and his house, which were sold at auction. Rembrandt continued to paint after his bankruptcy but was not allowed to sell his works to customers directly. He circumvented this law by having his son take over his business and sell his paintings for him.

The acclaimed American author Mark Twain also suffered similar financial strife. He invested his money in an automatic typesetting machine called the Paige Compositor — a move that turned out to be rather unwise and, after the failure of the invention, Twain was forced to file for bankruptcy in 1894. However, after discharging his debts Twain was adamant that he repay the money he owed. He quickly realised that he could make money by giving lectures to large audiences and set off to Europe, where he spent the next four years lecturing in every major city, eventually using the proceeds to repay all his debts.

Twain wasn’t the only successful writer forced to deal with money problems. In 1895 Oscar Wilde, the famous Irish poet, author and playwright, was forced to declare bankruptcy following his arrest and subsequent incarceration for “gross indecency”. During his two year sentence, his property was auctioned off leaving him financially destitute following his release from prison.

Celebrities facing financial difficulty continued in the modern age, with Burt Reynolds, actor and the star of films such as “Cannonball Run” and “Boogie Nights”, also facing bankruptcy in 1996 after his much publicised divorce from Loni Anderson, which resulted in debts of more than $10 million. As a result, his dinner theatre was foreclosed on by the mortgage lender and his ranch was sold to cover the debts. Luckily, following his bankruptcy, he starred in several successful movies eventually receiving a Golden Globe for his role in “Boogie Nights”.

Sherman Hemsley, a popular American soap opera star, also filed for bankruptcy in 1999 after being unable to repay $1 million worth of secured loans from a Las Vegas investment corporation, as well as having insufficient funds to pay taxes he owed to the IRS. Hemsley was able to dismiss the case however, and worked his debt out outside of the court.

Perhaps the most surprising bankruptcy case was that of the hugely successful American entrepreneur Donald Trump, who filed for Chapter 11 bankruptcy in 2004 in an effort to reorganise his business after his casino empire fell on hard times and negotiations with his creditors failed. This was the second time he had to file for bankruptcy due to his casino business, the first time being in 1992.

While bankruptcy is something that no one wants to go through, it’s a relief to many people that even successful actors, writers and businessmen find themselves in financial difficulty from time to time. Hearing of famous cases not only helps to ease the embarrassment felt by the many people going through the same thing but can also act as examples of how to avoid ever having to file for bankruptcy.

Daniel Collins writes on a number of topics on behalf of a digital marketing agency and a variety of clients. As such, this article is to be considered a professional piece with business interests in mind.