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7 celebrities gone bankrupt

Walt Disney had no choice
Walt Disney © Hulton-Deutsch Collection/CORBIS

Walt Disney had no choice

When Walt Disney started creating his own cartoons and his main client went into bankruptcy, Disney was forced to declare bankruptcy himself. If you've ever been to one of Disney's theme parks, you know that he used his money failure as an opportunity for a fresh start and went on to become one of America's great success stories.

Disney's story proves that with the right mindset and the right planning, you can emerge from bankruptcy with little or no burden afterward, says Barry Pulchin, partner in the Advisory Services Department of Prager Metis CPAs LLC in Plainview, New York.

"You need to have the mindset of an entrepreneur," Pulchin says. "Working the traditional 9-to-5 won't create wealth."

Instead, you have to be a go-getter or a person with vision, and you'll need experts to guide you, Pulchin says. That's why advance bankruptcy planning is necessary. You need to decide which type of bankruptcy is best for your circumstance -- Chapter 7, 11, 12 or 13 -- and you'll need guidance for that.

"Even though bankruptcy adversely affects your credit rating, some creditors see it as an attempt by you to better yourself," Pulchin says.

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