Gossip Girl actress said to have filed for bankruptcy



Kelly Rutherford

Reports have claimed that Gossip Girl actress Kelly Rutherford has filed for bankruptcy. The website TMZ says it has seen court documents of her filing for Chapter 7 bankruptcy.

So where did it all go wrong for Rutherford, and is this sort of thing common?
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Divorce

Rutherford is a Hollywood star, known not only for her role in Gossip Girl, but also for Generations and Melrose Place. The website claims that she was making $486,000 a month on the final season of Gossip Girl. However, she has been financially destroyed by divorce.

The show ended recently, and now her monthly income is said to be little over $1,000 a month. At the same time she has been going through a divorce and custody battle with her ex-husband Daniel Giersch.

ABC also claims to have seen the documents, which it says show she spent $1.5 million on legal fees on the long battle with her husband. Added to that is outstanding tax and debt charges, bringing her total debts to just over $2 million. Her assets are just $24,000.

During the fight she sold her home and a number of assets, she drew a huge chunk of her retirement savings, and has fallen behind on debt repayments.

In the end she lost the custody battle too, so her children, aged three and six, live in Monaco with their father. They remained there after a trip last summer.

It's a tragic tale, which so far Rutherford has not commented on or confirmed.

Common

However, divorce is a very common catalyst for debt problems. Even if the process is entirely amicable, couples are faced with splitting their assets, and suddenly having to find the money for two properties and two households. For many people, this can drive them into debt. Last year 157,000 couples divorcing led to a 10.2% increase in debt.

And often the process isn't amicable, which is where the costs can go stratospheric. The average cost of divorce is almost £13,000. However, this depends on the complexity of the case. Where there are complicated finances, children, and two people who are keen for their day in court, the bills soon reach tens of thousands of pounds, and over the years as battles rage, they can easily reach hundreds of thousands of pounds.

Rutherford is not the only famous face to have financial stress linked to their divorce.

Burt Reynolds filed for Chapter 11 bankruptcy in 1996 after a messy divorce from actress Loni Anderson in 1993 - as well as some failed investments.

Marvin Gaye filed for bankruptcy in 1976 after the royalties from his next album were promised to his ex wife as alimony. He called the album 'Here, My Dear'.

Sopranos actress Lorraine Bracco (who played Dr Melfi) filed for bankruptcy in 1999. She had spent five years fighting a custody battle with her ex, Harvey Keitel.

And while there's no talk of debt, John Cleese has been forthcoming about the impact of his financially crippling divorce. He has launched a stand-up 'Alimony Tour', and sold a huge collection of film props and signed photos to fund the settlement.

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Gossip Girl actress said to have filed for bankruptcy

In 1895 at the height of his success following the publication of The Picture of Dorian Gray and The Importance of Being Earnest, Wilde was charged with gross indecency and became embroiled in a libel trial to defend himself against accusations of homosexuality. He lost the battle and was forced into bankruptcy to cover legal costs for himself and the accuser, the Marquis of Queensberry – whose son Wilde was allegedly having an affair with. According to TrueTV.com, some of Oscar's most prized possessions, including first editions of his own books, were seized and sold at auction to pay the bill.

In a lesson that personal net worth means nothing against spiraling debts, the King of Pop filed for filed for bankruptcy in 2007 when he couldn't repay a $25 million loan on his home, Neverland Ranch.

Despite being recognised as the most successful entertainer of all time by the Guinness Book of World Records, Neverland became Jackson's downfall – reportedly costing more than $10 million dollars a year to maintain. According to Moneycrashers.com, even after signing a nearly $1 billion recording contract in 1991 and selling more than 750 million records, Jackson had just 0.05% of his net worth in accessible cash, which left bankruptcy the only option.

Actress Kim Basinger filed for bankruptcy in 1993 after she was sued for breach of contract for refusing to appear in film Boxing Helena, which later bombed. The actress lost a $8.1 million lawsuit to Main Line Pictures as a result and was forced to sell her $20 million investment in the town of Braselton, Georgia, USA.

When Mozart died at the early age of only 35 in 1791, he was poverty stricken and left vast amount of debt behind, which totaled over 4,000 florins (the equivalent of more than eight times the annual salary of a middle-class government employee, according to Noiseaddicts.com). Reports prevail that there was such little money in the house at the time of his death that Mozart was buried in a mass grave, the exact location of which is unknown to this day.

Everyone's favourite crooner filed for bankruptcy in 1976 after the royalties from his next album were promised to his ex-wife as a substitute for maintenance payments. The album was titled "Here, My Dear."

Despite creating one of the best-selling albums of all-time with Bat out of hell, Meat Loaf had to file for bankruptcy in 1983, after a series of bad business deals and legal issues. The rock star fell victim to unscrupulous managers, who he discovered were stealing his money – only for them then to sue him for breach of contract. Just when it looked like his luck was improving ahead of the release of his album Blind Before I Stop – the producer put a dance beat on every track, alienating his rock fanbase, making the album a failure and forcing him into bankruptcy for a second time.

Just when things couldn't get any worse for ex-Atomic Kitten Kerry Katona, she's been made bankrupt twice in five years.

The first was in 2008 after failing to deliver the final £82,000 of a £417,000 tax bill.

She was in the press for money issues again this earlier this year when a a TV advert for pay day loans fronted by Katona was banned for being irresponsible. Cash Lady offers loans of up to £300 a month with an annual percentage rate of 2,760%. "We've all had money troubles at some point, I know I have," says Katona in the TV ad. "You could see your bank and fill in loads of forms, but is there an easier way to get a loan ... it's dead fast too. Fast cash for fast lives."

However, Katona was dropped as the face of a payday lending company after filing for bankruptcy for a second time.

She filed for bankruptcy at Wigan County Court in July 2013, the Insolvency Service confirmed.

Disney's fist animation company Laugh-O-Gram Studio filed for bankruptcy in 1922 when its financial baker went broke. Disney was no longer able to pay his employees or his debts, and according to Totalbankruptcy.com, even struggled to buy a bus ticket to Hollywood. But he made it and there he made a fresh start with his new self-named production company that remains a worldwide success today.

Despite earning millions during his boxing career, former world heavyweight boxing champion Mike Tyson was forced to file for bankruptcy in 2003. He mounted about $27 million in bills, and is said to have squandered nearly $300m in ring earnings through lavish spending and bad advice, according to BBC News. The 37-year-old spent extravagantly on mansions, Bentley cars, jewellery, and even pet Bengal tigers while buying expensive gifts for his large entourage. Also in 2003, Tyson agreed to pay his ex-wife $6.5m from future earnings as part of a divorce settlement.

Drinking, gambling, fast cars and womanizing saw football wonder boy Best squander his cash and succumb to bankruptcy in 1982 with debts of £22,000. According to Bankruptuk.co.uk, at the time of his death in 2006, Best had an outstanding mortgage of £100,000 and owed London's Cromwell hospital £300,000 in treatment fees.

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