Respected singer and Grammy winner Dionne Warwick is the latest celebrity to file for bankruptcy and shock the entertainment and tabloid news media. According to her bankruptcy filing in Newark, the legendary singer owes more than $10 million to the Internal Revenue Service and to the California Franchise Tax Board.
Warwick is one of the top hit makers in the history of gospel, pop, adult contemporary and R&B music genres. She has also appeared in film and television and has served as an ambassador for the United Nations in the fields of global health and nutrition. In a statement prepared by her publicist, Warwick blames her financial mess on years of deficient financial management. Though she has sold millions of records in her lifetime, Warwick claims that her assets are down to just $25,000 in assorted clothing, furniture and jewelry.
Second time is the charm
This would be the second time Warwick, who was once a spokeswoman for the Psychic Friends Network, filed for bankruptcy. In 1998, she emerged from a Chapter 11 personal bankruptcy proceeding that required her to turn over three luxury vehicles to her creditors.
A great portion of Warwick’s tax debt consists of penalties and interest on unpaid assessments. Warwick has submitted proposals of repayment plans for her federal and California tax debts, but they have not been accepted. As bankruptcy lawyers in Winston Salem, NC know, unpaid tax obligations often signal greater debt problems that can lead to insolvency.
Although Warwick receives almost $21,000 in royalty income for her numerous chart-topping hits, her bankruptcy filings indicate that her monthly expenses leave her with just $10 in spending money each month.
Warwick is still touring and singing at the age of 72. Her career includes many charity and philanthropic efforts to address world hunger and AIDS research, and we wish her the best of luck with her bankruptcy petition.