It is a story that has been told a thousand times: a once filthy-rich millionaire now files for bankruptcy. Hollywood stars, music celebrities, and professional athletes are the most prone to this phenomenon. Celebrities who come into their money quickly often have very little experience in dealing with such wealth, and believe that the money will keep pouring in forever. Of course, a few flops at the box office, or a losing season, or lost record deals, and these red carpet stars are riding in their limos on their way to bankruptcy court.

How It Happens

Most celebrities and athletes who have lost it all point the finger at their associates rather than themselves. It is most often a business manager that is blamed for the financial losses and in some cases less than ethical managers have mishandled money. However, losing millions of dollars is generally not the fault of one person. It takes a team of individuals to be able to spend the type of money that most of these celebrities and athletes are making.

King of Pop

It is easy to see why many celebrities go bankrupt when a shopping trip can end up in millions being spent in a single day. For example, pop star Michael Jackson is often reported to be in financial trouble. It is no wonder as Jackson’s luxurious Neverland Ranch takes upwards of $200,000 per month just to keep running.

Hammer Time

Another one of Hollywood’s most famous spenders and bankruptcy stories is that of rap star, MC Hammer. The Hammer took the rap scene by storm in the early 1990s, but fell from grace just as quickly as his large entourage and fast living lifestyle managed to gobble up the estimated $33 million income that MC Hammer had been making.

Financial Knockout

Mike Tyson is another classic story of an athlete who fell from the top and found himself in debt. Mike Tyson was once the youngest heavyweight boxing champion ever. Since his glory days in the ring, Mike Tyson has managed to spend time in prison due to a rape charge, become considered a non-contender in the boxing ring, and spend all of his fortune by buying tigers as pets that cost $8,000 apiece, and living a lifestyle that required almost $400,000 a month to maintain.