debt

7 celebrities gone bankrupt

Stephen Baldwin lost his home
Stephen Baldwin © Fulvio Dalfelli/Demotix/Corbis

Stephen Baldwin lost his home

The youngest of the Baldwin brothers landed a number of roles as a reality show contestant, but the money he received from those gigs wasn't enough to keep him in his home and pay all his debts. In 2009, Baldwin and his wife filed for bankruptcy after his house went into foreclosure.

To avoid foreclosure, you should know from the beginning what your total monthly housing costs will be, including taxes, insurance and homeowners dues, says Troy Doucet, author of "23 Legal Defenses to Foreclosure: How To Beat The Bank."

"Don't even consider that you might earn more money in the future," Doucet says. "Just figure out if you can make the payments right now."

Lenders want no more than 31% of your total income to go to mortgage debt, and your total debt including your mortgage shouldn't exceed 38%, Doucet says.

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