What Miley Cyrus Has to Say About Bankruptcy

05 Sep What Miley Cyrus Has to Say About Bankruptcy

Miley Cyrus

Miley Cyrus has millions of dollars. What does she have to do with bankruptcy?

Miley Cyrus has been in the press a lot recently due to her appearance on the Video Music Awards (VMA). A new word–twerking–has suddenly entered our vocabularies. You may have an opinion one or the other about what she did. But what does this say about bankruptcy?

Miley Cyrus was one of the most successful child stars in history. Her dual role as Miley Stewart and Hannah Montana on the Disney Channel show “Hannah Montana” was a breakout hit. It was followed by a hit movie, a sold out music tour, and a platinum record album. In 2010, she earned $48 million, and her total earnings are over $150 million.

Even her controversial VMA appearance helped. According to Forbes Magazine:

Despite the scorn earned by her performance of “Blurred Lines,” Cyrus has since sold 90,000 digital downloads of her new track “Wrecking Ball” which debuted the day of the VMAs. The song now sits at No. 13 on Billboard‘s digital songs chart.

The impact has been even broader in social media. According to data outfit MusicMetric, the former Hannah Montana star has seen a 112% rise in activity over the week before, adding 226,273 new Facebook fans and 213,104 new Twitter followers from August 24 to August 28.

Not a good candidate for bankruptcy you say? You would be wrong.

Many of those who are ultra-wealthy today file for bankruptcy tomorrow, particularly athletes and entertainers. Professional athletes, from Allen Iverson (who earned $154 million during his playing career) to top hockey player Bobby Orr, have filed for bankruptcy or went broke. Sports Illustrated said that 2 years after retirement, 78% of former NFL players are bankrupt or broke. Entertainers are even worse. MC Hammer lost his $30 million mansion, and along with Walt Disney, John Wayne and Willie Nelson, ended up bankrupt.

Why? The reasons are mixed. Many athletes and entertainers spend as if they will always be getting the same amount of money; they put only relatively small amounts in savings and investments, and get lots of stuff–houses, cars, jewelry. Once their popularity peaks, or their skills decline, their income drops but their expenses don’t. They may get bad financial advice. And if they have a bad CD, or movie, or retire and the money dries up, they spend what they have in savings, and when that’s gone…there’s nothing. They end up in my office, or that of my colleagues.

Professional sports coaches are fond of saying that things are never as good as they look when their team is winning, and never as bad as they look when their team is losing. When you are doing well, that’s the time for saving and living less extravagantly than your then-current income might warrant. If it comes in, and you spend it all, you will have nothing when even slightly harder times come, let alone bad times.

Miley Cyrus would do well to heed these words. Or I may be seeing her professionally one of these days.

Image Credit: Wikipedia Creative Commons

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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