Celebrity Bankruptcy: Nicholas Cage Update

March 25th, 2010 by Reed Allmand

Actor Nicolas Cage’s Las Vegas mansion has just been sold after its foreclosure put the home into the hands of the mortgage lender. Nicholas cage has faced four foreclosures since his financial troubles were revealed last year.  Reportedly, the home sold in just one day for $4.95 million which is $3.6 million less than what the movie star paid for it in 2006.   Could Nicholas Cage have saved his home in bankruptcy?

Maybe…it would depend on many things.  For one, was it his primary residence and does he have the money to pay the mortgage?  In the case of Nicholas Cage, he is struggling with massive tax debts owed to the IRS which might be dischargeable in bankruptcy if there was no fraud involved and depending on when he filed those taxes.  It is not currently clear if Nicholas Cage has other debts such as credit card debt that measure up to his massive tax bill; but it is clear that he has stopped paying the mortgages on several of his homes and that he has publicly announced he is “broke.”

It was reported late last year that in 2002, 2004 and 2007 Nicholas Cage allegedly failed to pay his income taxes and the IRS placed liens against some of his real estate holdings. He reportedly failed to pay taxes because of bad advice received from a financial advisor.  But other sources insisted that he spent lavishly which is the ultimate reason for his foreclosures, problems with the IRS and the whole financial mess he is now faced with. However, even if bankruptcy was not able to keep his homes, it might help protect much of his future earnings by discharging many of his debt obligations.