Gossip Girl actress said to have filed for bankruptcy

Updated: 


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?


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.

The famous faces of bankruptcy

The famous faces of bankruptcy

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