We’re obsessed with celebrity gossip — watching stars react to internet trolls, scrolling through “most hated celebrities” lists, wondering to ourselves, “Why do people hate Nickelback?” But our favorite type of drama revolves around how some of the richest, most famous people in Hollywood became broke celebrities.
Over-the-top spending, tax troubles and legal battles can all eat away at even the most enormous fortunes, as many of the celebs on this list found out.
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Gary Busey: Debt to the IRS
For an actor with a career spanning five decades, Gary Busey doesn’t have much fortune to show for it. Busey made a name for himself as an actor in films including “Thunderbolt and Lightfoot” and “Point Break,” as well as television classics like “Walker, Texas Ranger.”
Despite his acting success, though, Busey filed for chapter 7 bankruptcy in 2012, claiming that he owed up to $1 million to creditors including the IRS. Today, he’s half a million dollars in debt, making him one of the most broke celebrities around.
Heidi Montag: Overspending
This reality star gained notoriety through her role as Lauren Conrad’s best-friend-turned-enemy on “The Hills,” and through her relationship with costar Spencer Pratt. Montag earned her fortune via her four-year stint on “The Hills,” and her appearances on other reality TV, including “Celebrity Wife Swap.” At the peak of their careers, Montag and Pratt had accumulated a $10 million fortune.
However, not all of Montag’s business ventures were successes. Her debut album, “Superficial,” was a failed attempt to break into the music industry, selling less than 1,000 digital copies in its first week and peaking at 41 on the Billboard Heatseekers chart. And lavish spending — including an estimated $1 million dollars on handbags and an additional $1 million on clothes — ate away at her net worth. Today, Montag has a net worth of just $20,000, according to Celebrity Net Worth.
Lindsay Lohan: Bad Reputation and IRS Debt
Lindsay Lohan is the poster child for the dark side of fame. The actress started her career strong and early, with starring roles in “The Parent Trap” as a child and in “Freaky Friday” and “Mean Girls” as a young adult. However, she soon developed a reputation for being difficult to work with — even getting admonished by film exec James G. Robinson, the head of the production company that produced Lohan’s 2007 film “Georgia Rule.”
Although she made millions through her work as an actress, model and recording artist, Lohan’s legal and personal troubles eroded much of her net worth. In 2012, Lohan had her bank account seized by the IRS to claim the reported $233,000 she owed in back taxes. The actress was near bankruptcy at the time, and today only has a net worth of $500,000.
Kelly Rutherford: Legal Battles
Actress Kelly Rutherford got her start on the ’80s soap opera “Generations” and has worked consistently ever since, recently starring as Lily van der Woodsen on the hit CW show “Gossip Girl” — but her net worth doesn’t reflect her success.
The root of her money troubles? Legal battles. Rutherford was locked in a lengthy custody dispute with ex-husband Daniel Giersch. In 2013 — five years after the divorce proceedings were initiated — Rutherford revealed she was penniless. Her legal fees and travel expenses to visit her children, who were sent to live with Giersch in Germany, forced her to declare bankruptcy, according to Vanity Fair. In the aftermath, she’s managed to build her net worth up to a relatively scant $1 million.
MC Hammer: Overspending and IRS Debt
When it comes to the tale of the one-hit wonder, no one can touch MC Hammer, real name Stanley Kirk Burrell. Hammer earned his success as a pop-rap artist with his uber-hit “U Can’t Touch This” — the first single by a rap artist to reach Billboard’s coveted Diamond status. Somewhat less profitably, he popularized shiny harem pants, or “hammer pants.”
Hammer’s hit single earned him some serious bank. He pocketed a reported $33 million at the peak of his success in 1991. But over-the-top spending on luxury cars, a record company, airplanes and a $30 million home that he built from the ground up — which eventually sold for less than $7 million — ate into his fortune. He filed for bankruptcy in 1996 and would continue to owe the IRS thousands in back taxes for the next 20 years. Despite a current net worth of $1.5 million, his debt to the government of $800,000 remains unpaid, according to Celebrity Net Worth.
Mike Tyson: Divorce and Imprisonment
Mike Tyson earned his first fortune as an American boxing icon — so famous he even inspired a Nintendo video game. However, Tyson’s descent from riches to rags was a steep one, as the once formidable boxer made one blunder after the next.
Tyson struggled with personal and legal issues starting in the late ’80s. As he went through a divorce, Tyson grew increasingly out of shape and started to lose his superstar image. Not long after, he was convicted of rape charges and served three years in federal prison on a 10-year sentence. The boxer seemed to be making a comeback after he returned to the sport, but then infamously bit off part of opponent Evander Holyfield’s ear during a 1997 match. Five years later, Tyson filed for bankruptcy, announcing his retirement shortly thereafter in 2005.
Despite his struggles, Tyson has managed to recuperate somewhat. His reported net worth of $3 million comes from various media gigs, including an appearance in “The Hangover.”
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TLC (T-Boz and Chilli): Debt and Underpayment
How can you sell 10 million albums and still be broke? Ask TLC. The members of the group famously found themselves low on cash even after the massive success of their 1994 album, “CrazySexyCool.” In a 2007 documentary about her life, group member Lisa “Left Eye” Lopes explains that each member earned just $300,000 from the album due to taxes, fees paid to the recording studio and record company cuts from profits.
While TLC eventually sold more than 65 million albums worldwide, that didn’t necessarily translate into riches for the group. Despite being a part of the best-selling American girl group of all time, Tionne “T-Boz” Watkins filed for bankruptcy for the second time in 2011 with over $1 million of debt, and now has a net worth of just $500,000. Rozonda “Chilli” Thomas is doing much better than her former bandmate, starring in VH1’s “What Chilli Wants” and holding onto a net worth of $10 million.
Shia LaBeouf: Erratic Behavior
With fans regularly Googling, “What happened to Shia LaBeouf?” it’s clear that this actor took more than one wrong turn over the course of his career — and he’s only 32. Shia LaBeouf started out as Hollywood’s next big thing, transitioning from Disney Channel child actor to blockbuster heavyweight with his roles in “Disturbia,” the “Transformers” franchise and “Indiana Jones and the Kingdom of the Crystal Skull.”
However, his increasingly erratic behavior starting in 2012 led many to believe he was heading for a breakdown. From walking the red carpet wearing a paper bag over his head to organizing intense live art exhibits, LaBeouf isn’t living the typical Hollywood life. Compared to some on our list, this hasn’t impacted his finances too much — he still has a reported net worth of $25 million — but his public bad-mouthing of Hollywood and reputation for oddity have certainly kept his fortune from growing at the pace it was in previous years. For instance, his war drama “Man Down” sold only one ticket during its opening weekend in the UK.
Johnny Depp: Overspending
With more than 30 years’ worth of acting credits under his belt, it’s tough to imagine a bigger star than Johnny Depp. Depp cultivated an artsy image with iconic films like “Edward Scissor Hands” and “What’s Eating Gilbert Grape” in the early ’90s, but he truly hit it big with his role as the swaggering Captain Jack Sparrow in the “Pirates of the Caribbean” franchise.
Johnny Depp commanded an impressive salary of $20 million per film, but the box office earnings from his movies haven’t always stacked up to his star power. Forbes named Depp the most overpaid actor in Hollywood two years in a row in 2015 and 2016.
Perhaps it’s no surprise, then, that Depp has recently run into financial problems. Rolling Stone and Variety have recently reported that the actor has spent himself nearly to the point of financial ruin. How? By putting up $3 million to shoot journalist Hunter S. Thompson’s ashes from a cannon, apparently, and spending $30,000 on wine each month, among many other lavish pursuits.
Earlier this week Depp settled a $25 million dollar lawsuit that claims his ex-management group mismanaged his money. Depp is also being accused by his location manager on the set of “City of Lies” of allegedly punching him on set.
Michael Jackson: Overspending and Legal Debt
The rise and fall of Michael Jackson has been well-documented, though the focus is usually on his legal troubles more than his financial ones. But the King of Pop went from one of the most iconic artists of all time — one that earned up to $100 million a year — to one that died deep in the red.
How did it happen? Jackson ate away at his fortune with real estate spending — including millions for Neverland Ranch — and funding $65 million worth of art projects. Ongoing legal fees to combat the scandal over his child molestation charges in 2005 also took a toll on his finances, totaling $20 million, according to Celebrity Net Worth.
Despite his financial mishaps while alive, Michael Jackson’s brand remains strong to this day. Through rebuilding his legacy, Michael Jackson’s executors have brought his posthumous net worth to $500 million, making his estate the richest one on our list.
More on Celebrities’ Net Worths:
- ‘The Voice’ Coaches Showdown: Who Earns More?
- 12 Essential Money Tips for Every Phase of Your Financial Life
- Where Are They Now: TV Stars Who Now Have Big-Screen Paychecks
All net worth figures are according to CelebrityNetWorth.com unless otherwise noted.
Priscilla Aguilera contributed to the reporting for this article.