Personal bankruptcy (also known as personal insolvency) law allows, in certain jurisdictions, an individual to be declared bankrupt, which is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Personal bankruptcy is distinguished from corporate bankruptcy, which generally does not directly affect the business owners' personal assets.
Modern bankruptcy law often distinguishes reorganization, in which only some of the bankrupt's assets are taken, a repayment plan is devised and part of the debt is discharged, from liquidation. In the latter type of bankruptcy, all of the debtors assets are included in the bankruptcy estate, sometimes in addition to his disposable income for a period of time, after which all of the debts are discharged.
The details vary between jurisdictions. In the US, the liquidation bankruptcy is governed by Chapter 7 of the Title 11 of the United States Code and is generally available to individuals passing a means test. Reorganization bankruptcy is governed by Chapters 11 and 13. Chapter 11 is mostly used by high net-worth individuals. In the 12-month period ending June 30, 2017, Chapter 7 and Chapter 11 bankruptcy filings accounted for, respectively, 474,258 (61%) and 1,099 (0.14%) out of 772,594 nonbusiness bankruptcy filings in the USA.
Notable bankrupts Bankruptcy filings by celebrities generate extensive publicity, which has been cited as a factor contributing to a shift towards a less negative public perception of personal bankruptcy observed since the 1960s. Lawyers have reported using celebrity examples to persuade their clients to file for bankruptcy.
Listed below are notable individuals who filed for personal bankruptcy or were subject to a similar form of insolvency management process. The list does not include business bankruptcies and bankruptcies that were not officially recognized.
Key
Chapter 7 Chapter 7, Title 11, United States Code USA Chapter 11 Chapter 11, Title 11, United States Code USA Chapter 13 Chapter 13, Title 11, United States Code USA BR 1914/1926 Bankruptcy under the Bankruptcy Acts 1914 and 1926 United Kingdom IA 1986 Bankruptcy under the Insolvency Act 1986 United Kingdom
Name Known as Bankruptcy type Year of filing Details Dutch painter Cessio bonorum 1656 His assets, including a collection of paintings, were subsequently auctioned off. Swedish engineer, father of Alfred Nobel Petition to Stockholm's magistrates' court 1833 The bankruptcy was a result of a loss of three barges carrying construction materials. He became insolvent again in 1856.Biography Opens Door To Nobel. The Bridgeport Post. Bridgeport, Connecticut. Sunday, November 18, 1962. Retrieved 2017-08-20. American Civil War photographer Warrant in bankruptcy issued by the District Court for the Southern District of New York. 1873Bankruptcy Notice. The New York Times. Monday, March 10, 1873. Retrieved 2017-08-20. Brady ran into debt after investing over $100,000 to create over 10,000 plates. He expected the US government to buy the photographs after the war, but it refused to do so, thus forcing Brady into bankruptcy. In 1875, the United States Congress purchased the entire archive for $25,000, which went towards the debts. He died destitute in the charity ward of Presbyterian Hospital in New York in 1896. founder of Heinz 1875 Assets of $110,000 and debt of $160,000.
The bankruptcy was a result of a failure of his condiment business Noble and Company selling horseradish, caused by the financial crisis known as the Panic of 1873. He was twice arrested and released. He was tried for fraud in 1876 and acquitted. In the same year he started a new company, F & J Heinz, with his brother John Heinz and a cousin Frederick Heinz. One of its products was the tomato ketchup, which proved highly successful. Heinz was released from bankruptcy in 1885. American artist Bankruptcy Act 1869 1879 The bankruptcy was caused by legal costs of a libel lawsuit against the critic John Ruskin. Whistler won the case, but the damages awarded were insufficient to cover the costs. (known as Mark Twain) American author Assignment for Benefit of Creditors 1894 He owed over $100,000. The bankruptcy was caused by failed investments, notably in the Paige Compositor, a mechanical typesetter that failed because of its complexity and imprecision. Clemens paid off his debts in full, despite no legal obligation to do so, after conducting a series of profitable public lectures.
The bankruptcy was filed under the New York state law since the United States did not have a federal bankruptcy law at the time. Irish author Bankruptcy Act 1883 1895 He owed £3591. The bankruptcy was caused by legal costs following an unsuccessful lawsuit, which also led to his imprisonment for homosexual behaviour. He died destitute in 1900. American actress 1931 No assets against debt of $50,000.But Film Favor Fought For Yet. The Los Angeles Times. Los Angeles, California. Sunday, August 23, 1931 . Retrieved 2017-08-20. Caused by the Wall Street Crash of 1929. co-founder of 20th Century Fox Section 21a of the Bankruptcy Act (11 U.S.C. § 44(a)) 1936In re Fox, 16 F.Supp. 950, District of New Jersey (1936), online version Assets of $1,600,000 and debt of $9,535,261.
In 1942, he was imprisoned for obstructing the justice during the bankruptcy proceedings. He attempted to bribe judge John Warren Davis with a $27,500 loan. He served half of his one-year sentence. co-founder of General Motors Filed in the Federal District court in New York. 1936 His listed clothing worth $250 as his only asset against a debt of $914,000.
The bankruptcy followed the Wall Street Crash of 1929 and the ensuing Great Depression, which led to the failure of his company Durant Motors. American actress Filed in US Federal Court.Veronica Lake, Husband File Bankrupt Plea. Chicago Tribune. Chicago, Illinois. Tuesday, April 17, 1951. Retrieved 2017-08-20. 1951 Assets of $168,050 against debt of $156,573.91.
Around the time of the bankruptcy, the IRS seized her property due to non-payment of the income tax. American actor Chapter 11 1962 Assets of $500 against debt of $464,914. American actress and singer 1963 Caused by bad oil investments. British drummer BR 1914/1926 1965 He owed £4,066. American singer Filed in US District Court. 1971Vic Damone Bankrupt. The Times (San Mateo, California). Wednesday, July 14, 1971. Retrieved 2017-08-20. Assets of $35,371 against debt of $784,137 including nearly $300,000 in unpaid taxes. Damone filed for bankruptcy a month after his divorce from actress Judith Rawlins. British musician BR 1914/1926 1972 He owed £73,000. American singer Filed in a federal court. 1976 He owed about $6,000,000. Filed for bankruptcy together with his wife.Isaac Hayes Auction. Santa Cruz Sentinel. Santa Cruz, California. Friday, April 29, 1977. He described tax liens as the precipitating factor for bankruptcy.Isaac Hayes Files Bankruptcy. Santa Cruz Sentinel. Santa Cruz, California. Monday, December 27, 1976. American singer 1976 He owed $6,946,058. The bankruptcy followed his divorce and a court order requiring him to pay his ex-wife $600,000 of alimony. He filed for bankruptcy for his company Right-On Production at the same time. American wrestling promoter Filed in a U.S. bankruptcy court. 1976 They owed a total of $955,805 to 26 distinct creditors. The joint bankruptcy followed a failed investment. American wrestling promoter and politician (known as Johnny Paycheck) American singer Filed in U.S. Bankruptcy Court 1976 Assets of $153,232 against debt of $488,611.Johnny Paycheck Files Personal Bankruptcy Bill. The Tennessean. Nashville, Tennessee. Wednesday, June 2, 1976. Retrieved 2017-08-20. 1982Paycheck bankrupt. Courier-Post. Camden, New Jersey. Friday, September 10, 1982. Retrieved 2017-08-20. He filed for bankruptcy shortly before an auction was due to take place to sell his belongings to satisfy tax debt. 1990 He owed $1,600,000, mostly unpaid taxes. He was serving a prison sentence for assault at the time. American football player 1977Charlotte Sun, Florida, May 10, 1999, republished September 26, 2009 television host Chapter 7 1978 He owed $352,000. The bankruptcy was caused by his inability to find employment following a grand larceny charge. He began hosting the Larry King Show in the same year. American musician Chapter 11 1979 Assets of $56,845 against debt of $576,638.
Petty used the bankruptcy to strengthen his position in negotiations with the music label MCA Records, which had bought his indie label. American singer Chapter 7 1981 Caused by a lawsuit brought by her former manager, following a split of her band. Northern Irish footballer BR 1914/1926 1982 He was made bankrupt by the Inland Revenue over £22,000 of unpaid taxes. He was discharged in 1992. He said of his career: "I spent a lot of money on booze, birds [women] and fast cars – the rest I just squandered". (known as Meat Loaf) American musician Chapter 7 1983 He owed $1,600,000. American filmmaker Chapter 11 1983 An involuntary Chapter 11 petition was filed by creditors for one of Coppola's companies, Hollywood General Studios.Chapter 11 sought for Zoetrople. Reno Gazette-Journal. Reno, Nevada. Friday, July 29, 1983. This and the following bankruptcies were a result of financial failure of the movie One From the Heart which Coppola had financed with his own money.The cliff-hanger is over: Coppola to sell Zoetrope. Democrat and Chronicle. Rochester, New York. Wednesday, January 25, 1984. Chapter 11 1990 At the same time, Coppola filed a separate Chapter 11 petition for one of this companies, Zoetrope Productions.Coppola Files Bankruptcy; Filming 'Godfather III'. Logansport Pharos-Tribune. Logansport, Indiana. Tuesday, January 26, 1990. Chapter 11 1992 Combined assets of $52,000,000 and debts of $98,000,000.
The bankruptcy covered Coppola personally together with his wife, and his two companies, Zoetrope Corporation and Zoetrope Productions. British musician Chapter 7 1984 Assets of $2,404,430 against debt of $3,697,163.
Among the causes of bankruptcy were impulsive real estate purchases and failed investments. American singer Chapter 7Armen Boladian, Bridgeport Music, Inc., Southfield Music, Inc., and Westbound Records, Inc. v George Clinton and Malbiz Music and Occupants of 839 Knapp Highway. State of Michigan Court of Appeals. August 19, 2008. 1984 Clinton claims that the bankruptcy was "fictitious" — part of a conspiracy to deprive him of his income. American musician Chapter 11United States v. Isley, 04-3942 (3rd Cir. 2006) 1984 or 1987 The case was later converted to Chapter 7. Chapter 11Billboard, 22 Jan 2000, page 36. 1997 The case was converted to Chapter 7 in 1998. He was discharged in 2001. In 2005, he was convicted for tax evasion and sentenced to three years and one month in prison. American singer 1985 Caused by unpaid taxes in connection with his gambling addiction. Governor of Texas and Treasury Secretary Chapter 11 1987 At the same time, his real estate investment firm filed for Chapter 7 bankruptcy. The bankruptcy was caused by unsuccessful investments. English singer Chapter 7 1987 Assets of less than $50,000 against debt of more than $1,000,000.