Cleardebt

Cleardebt

March 16, 2010 02:30 ET

ClearDebt Report on the Increase in Celebrities Struggling Financially

MANCHESTER, UNITED KINGDOM--(Marketwire - March 16, 2010) - Leading IVA and Debt Management specialists, ClearDebt, take a look at widespread debt within the showbiz and entertainment world and why shining stars are as vulnerable as us all.

There is no avoiding the fact that debt is on the rise. Stories of debt ridden and failing businesses are common throughout the UK and World media with major brands like Woolworths and Greenwoods disappearing from our high streets.

However, most of us associate the idea of bankruptcy with businesses. We certainly don't think of these problems in connection with the glamorous world of show business and entertainment. But in fact, many famous people do not conform to the idea of a luxurious, trouble-free existence and the list of struggling celebrities declaring bankruptcy is a growing one, with several high profile cases in recent months.

One of the first celebrity bankruptcies to hit the UK press was Kerry Katona in August 2008. Kerry, the former Atomic Kitten singer and star of the Iceland adverting campaign was declared bankrupt after failing to meet her tax bill of £417,000.

In February 2009, radio DJ Mike Read was declared bankrupt for the second time and was forced to sell his much loved memorabilia and record collection although this only reached a tenth of its expected value leaving creditors unpaid.

In March 2009, celebrity chef and author Paul Rankin and his wife avoided bankruptcy proceedings by entering into an individual voluntary arrangement (IVA) with their creditors.

August 2009 saw actor and voice of Bob the Builder, Neil Morrissey make the decision to address his £2.5 million debt via an IVA as we reported in our blog – Men behaving proudly.

What is it about the celebrity lifestyle that makes financial troubles likely? One reason is undoubtedly the lack of a fixed, steady income: a Hollywood actor, TV or pop star, may well earn millions one year and little or nothing the next, but will still have the same expenses and, of course, a tax bill which assumes high earnings. Certainly, the most common cause of bankruptcy proceedings among celebrities seems to be unpaid tax bills.

Then there is the lifestyle itself – the life of extravagance that we all love to read about, but which needs a huge and continuing income to support it. Celebrities may be worth millions, but they also spent millions.

Finally, high-earning entertainers also have high-maintenance families and other dependants, and when things go wrong there is a great deal of property to split. Divorce settlements and alimony have played a part in many celebrity bankruptcies.

In short, it should be no surprise that famous, talented people so often find themselves in financial trouble. As author and blogger Brian Cuban puts it: 'The talent that made them rich in the first place lies in something – television hosting, for example, or heavyweight boxing - that doesn't teach them anything about how to stay rich.'

ClearDebt are a leading provider of IVAs, debt management plans and advice with the aim of providing straightforward, manageable solutions for people struggling with debt.

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