Gail Porter is declared bankrupt - and she's not alone

Sarah Coles
·2-min read
Gail Porter declared bankrupt
Gail Porter declared bankrupt

Gail Porter has been declared bankrupt at the High Court, after being unable to pay her debts. She has reportedly faced enormous stress while she struggled to deal with her financial situation, but eventually ended up in bankruptcy.

Porter has been back on our screens recently, with TV presenting jobs and a stint in Celebrity Big Brother. However, it is thought that she had struggled to pay a tax bill, which forced her to go through this process.

Paul Rouse, partner and head of the National Creditor Services division of Mazars, says this is fairly common. He explains: "Often, a celebrity has a sporadic income, with small peaks and long troughs.The lifestyle that they enjoy when times are good and when work floods in, is unsustainable when times are bad, either professionally and personally"

See also: Personal insolvencies up by nearly 20%

See also: Higher insolvency rate for women reflects 'gender inequality in economy'

See also: Is your Christmas borrowing something to worry about?

Celebrity cash flow

Porter would not be the first to be landed with tax for a great year at a time when she is going through a downswing in income.

It means we have become used to seeing celebrities go through bankruptcy. One particularly notable example is the boyband Blue - because all four members of the band have gone through bankruptcy in recent years. Anthony Costa was first, and said he immediately ran into difficulties after the band split - going from making £250,000 a month to £45 a week.

And the rest of us...

But it's not just celebrities who have to worry about variable incomes nowadays. The enormous rise in self-employment and zero hours contracts mean millions of people have no idea what they will make from one month to the next, which is bound to cause problems.

The best advice for living within your means is to draw up a budget of everything you have coming in and everything you have going out, and making sure the two are balanced. This can cause real headaches when the amount coming in is so variable.

As a result, a study by PayPlan last year found that self-employed people are far more likely to have debt problems than people who are employed. They also owe around a third more, and around half of them 'seriously worry' about their personal finances either often or all of the time.

The experts recommend that anyone on a variable income draws up a pessimistic budget, based on a bad month, and then puts money aside in a savings account during any good months. They also say it's vital to put aside cash in a separate account to pay any tax, so you can always pay the taxman.

As anyone on a variable income knows, however, in the difficult months, this can be far easier said than done.