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.
Over-the-top spending, tax troubles, legal battles and launching new careers can all eat away at even the most enormous fortunes, as many of the celebs on this list found out.
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 he was more than $500,000 in debt. Today, he’s turned his finances around, with a net worth of $500,000.
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 successful. 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 and Pratt have a combined net worth of $300,000.
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 $800,000.
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 back up to $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 continued to owe the IRS thousands in back taxes for the next 20 years.
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 a starring role in “Tyler Perry’s a Madea Family Funeral” and the animated series “Mike Tyson Mysteries.”
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, late group member Lisa “Left Eye” Lopes explained 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 $1.5 million. Rozonda “Chilli” Thomas is doing much better than her former bandmate, holding onto a net worth of $8 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 34.
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 U.K.
Johnny Depp: Overspending
With more than 35 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 run into financial problems with profligate spending — including $3 million to shoot journalist Hunter S. Thompson’s ashes from a cannon and spending $30,000 on wine each month, among many other lavish pursuits.
In 2018, Depp settled a $25 million dollar lawsuit that claims his ex-management group mismanaged his money. He’s also involved in a very public ongoing legal battle with ex-wife Amber Heard.
He still has cash to fall back on, however. According to Celebrity Net Worth, Depp has a current net worth of $200 million.
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 this list.
Nicolas Cage: Overspending and IRS Debt
Once upon a time, Nicolas Cage had a net worth of $150 million dollars, according to People. Starring roles in hit films like “Gone in Sixty Seconds” and “National Treasure” reportedly earned him $20 million apiece, allowing him to afford a lavish lifestyle — but maybe not quite as extravagant as the one he was living.
For example, in 2006, the actor purchased more than 40 acres of a private island that was listed at $3 million. While that price tag might sound reasonable for a man of Cage’s wealth, he took it up a notch by also buying four luxury yachts — totaling $20 million — along with the island.
That was actually just the tip a small portion of his real estate portfolio, as he once owned 15 residences in California, Rhode Island, New York, Las Vegas, New Orleans, the Bahamas, Germany and England — just to name a few — according to Forbes. In 2009, Cage sued his former business manager for $20 million, accusing him of negligence and fraud, and sending him “down a path toward financial ruin.
That same year, the IRS hit Cage with several years of unpaid tax bills, totaling $13.3 million, according to TMZ. By 2012, TMZ reported the actor had been working hard to pay off his IRS debts, with his then-balance totaling just $6 million. His net worth is currently listed at $25 million, so it seems he’s made significant progress toward rebuilding fortune.
Willie Nelson: IRS Debt
In 1990, the IRS seized Willie Nelson’s assets and properties in six states, to help pay the estimated $32 million the country music superstar owed in back taxes. Nelson blamed the mishap on mismanaged earnings and bad advice from his accountants, but even after his assets were seized, his debts still totaled $16.7 million — including $10.2 million in interest and penalties.
Nelson and the IRS settled the debt for $9 million in 1993 — more than $3 million had already been paid off — and he recorded the album “The IRS Tapes: Who’ll Buy My Memories” to help pay off the rest. The IRS only collected $3.6 million from sales of the album, but Nelson was able to pay off the remaining balance within a few years, according to Forbes.
Now fully out of the red, Nelson’s net worth is $25 million.
Toni Braxton: Overspending and IRS Debt
Grammy winner Toni Braxton is known for belting out hits like “Another Sad Love Song” and “Breathe Again,” but she hasn’t had as much success with managing her finances. She’s filed for bankruptcy twice — first in 1998 and more recently in 2010.
In her 2010 bankruptcy, she listed assets up to $10 million and debts totaling as much as $50 million. Specific information regarding her financial woes wasn’t revealed, but her bankruptcy documents revealed a lengthy list of possible creditors. Some of the lavish companies included The Four Seasons Hotels, Neiman Marcus, Tiffany & Co. and BMW Financial Services. The IRS also filed a $396,000 lien against her earlier that year.
Braxton settled her second bankruptcy in 2013. Six months later, she purchased a $3 million mansion in the celeb-heavy Calabasas, California neighborhood The Oaks, according to TMZ. Her net worth is currently listed at $10 million, likely been boosted by her reality show “Braxton Family Values,” which has been on WE tv since 2011.
Brett Butler: Personal Struggles
She held the title role on the ABC sitcom “Grace Under Fire” from 1993-1998, but that didn’t stop Brett Butler from going broke. Rumors swirled that the show was canceled due to Butler’s struggles with addiction and reportedly difficult on-set behavior.
After several stints in rehab, the actress left Los Angeles for a farm in Georgia, where she eventually ran out of money and was forced to move into a homeless shelter. Moving past her struggles, Butler returned to Hollywood for a fresh start in 2011.
She quickly scored roles on both “The Young and the Restless” and “Anger Management.” More recently, Butler has appeared on “The Morning Show” and “The Walking Dead.” Working hard on her comeback has allowed her to amass a net worth of $10 million.
Dennis Rodman: Shady Financial Advisor
During his 12 seasons in the NBA, Dennis Rodman earned more than $27 million, according to Spotrac. However, his net worth is currently just $500,000 — a small fraction of his one-time fortune.
Much of the NBA Hall of Famer’s financial downfall was caused by Peggy Ann Fulford, a financial advisor he met in the mid-2000s. According to Sports Illustrated, Fulford took control of his bank accounts and removed his debit card access at one point post-retirement, claiming his excessive spending habits proved he couldn’t be trusted with his own money.
Fulford was arrested after authorities learned she was overseeing 85 bank accounts — pushing one from the other to fund her lavish lifestyle — and laundering money through more than 20 shell corporations — including three in Rodman’s name. In 2018, she was sentenced to 10 years in prison for scamming Rodman and others, and ordered to pay $5.7 million to her victims in restitution. Rodman also filed a separate lawsuit against Fulford in 2019.
Stephen Baldwin: Overspending
In the ’90s and early 2000s, Stephen Baldwin — Hailey’s dad — graced the silver screen starring in films like “The Usual Suspects,” “Bio-Dome” and “The Flintstones in Viva Rock Vegas.” Despite his success, he still filed Chapter 11 bankruptcy in 2009, claiming more than $2.3 million in debts.
Since then, the self-described born-again Christian has largely shifted his focus to faith-based films. Some of his recent works include “A Walk With Grace” and “The UnMiracle.” This hasn’t made him Hollywood rich, but it has allowed him to amass a healthy net worth of $500,000.
Sinbad: Overspending and IRS Debt
Comedian Sinbad — i.e., David Adkins — dominated the 1990s starring in films like “Jingle All the Way,” “Good Burger,” “First Kid” and even his own television series “The Sinbad Show.” All of his success still didn’t keep him from filing bankruptcy — twice.
The first case, filed in 2009, was ultimately dismissed, because Sinbad didn’t file the correct documents, according to TMZ. However, he got it right in 2011, when he filed Chapter 7 bankruptcy, claiming he was nearly $11 million in debt. This included owing $374,979 to American Express, $32,199 to Bank of America, $2.3 million to the California Franchise Tax Board and $8.3 million to the IRS.
It seems Sinbad has since managed to get his financial situation under control, as he currently has a net worth of $4 million.
Meat Loaf: Legal Troubles
Born Marvin Lee Aday, Meat Loaf hit the music scene in 1977 with his mega-popular album “Bat Out of Hell.” Unfortunately, financial woes soon followed, as spats with his record company led to a series of legal battles. The rocker told the Daily Mail’s Event he had $100 million in lawsuits against him at one point, which forced him into bankruptcy in the 1980s.
Released in 1993, his comeback album “Bat Out of Hell II: Back Into Hell” — featuring the No. 1 hit “I’d Do Anything for Love (But I Won’t Do That) — went multi-platinum. He also found success in acting, appearing in films like “Fight Club” and “Wayne’s World.”
Meat Loaf did manage to bounce back and reach a net worth of $40 million before his passing in early 2022.
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Priscilla Aguilera contributed to the reporting for this article.
All net worth figures are according to CelebrityNetWorth.com unless otherwise noted.