Rags, Riches and Royalty: The Parable of the Thomas Markle Bankruptcies

The latest celebrity gossip and rags to riches story also has a more complicated financial lesson to go with it. As the entire world watched Meghan Markle marry into England’s royal family, there was other fascinating drama lurking behind the Markle name. 

Meghan’s high octane public profile as the Duchess of Sussex combined with an unruly extended family has inspired significant incidents in the press for her to contend with, such as her half-brother’s attempt to stop the royal wedding. However, Markle’s relationship with her father, Thomas, is far more interesting given that he supported her career and education with some lottery winnings.

Thomas Markle, Lighting Director and Almost-Millionaire 

It all started in 1990 when Thomas Markle, a frequent purchaser of lottery tickets, won $750,000 in the California state lottery. Up until that point, he’d had a very successful career in Hollywood as an Emmy-award winning lighting director, most notably for the long-running show General Hospital. Between his salary and lottery winnings, he prioritized putting Meghan through private school, where she excelled as a star student. Thomas also supported her career through his own professional Hollywood connections. Meghan went on to study at Northwestern University and continued to pursue an acting career, where she ended up in one of the lead roles on the show Suits, the role for which she is most known.

However, he declared bankruptcy in 2016 over the sum of $30,000. After that, he retired and currently resides in Rosarito, Mexico, where the cost of living is cheaper than his previous long-term home in Los Angeles. The real question, however, is what happened between 1990 and 2016 – and did it have an impact on his familial relationships?

The Bankruptcy Years

To start, Thomas Markle filed twice for bankruptcy:once in July 1991 and then again in February 1993. Interestingly, his July filing may have been dismissed in December of the same year since the later schedules don’t reflect it as being discharged. The bankruptcy in 1993 also took over four years to be discharged, which is usually only typical of a Chapter 13 filing or a very drawn out Chapter 7. 

However, this all took place after his lottery winnings had been doled out. Thomas reportedly invested some of his money into an ill-fated jewelry business and then used the remaining funds to help each of his three children get a head start in life. For Meghan, that help led to a prestigious private Catholic school, and eventually small-screen stardom. 

Financial Difficulties – and Confusion 

When Thomas Markle filed for bankruptcy in the early ‘90s, according to records at that time, his personal property only amounted to a value of $3,931. He put in a scheduled expense for vehicle insurance –- although there’s no vehicle on his paperwork. Reports say he also listed transportation at $450 per month. 

That could have been employment-related, considering that lighting directors sometimes have to put in heavy hours in far flung locations. This is all part of what goes into a typical bankruptcy since people are allowed to declare necessary expenses and other terms of the filing. 

Key to Thomas’ filing is reserving $200 per month with the use of a Prudent Reserve. A Prudent Reserve is a designated sum that’s put aside for so-called extraordinary circumstances. It is not held for use in normal circumstances. Other inconsistencies exist in the paperwork, which may reflect the work of an inexperienced attorney, or perhaps a paralegal or bankruptcy preparer. 

Thomas’ filing lists a monthly payment of $300 to the IRS, but no IRS debt appears on his scheduled payments list. He also has a franchise tax payment of $100 per month, but this generally is a tax used for business purposes. 

All in all, he’s had to file for bankruptcy three times. Figuring out if bankruptcy is a good option is a process that should be reviewed carefully and thoroughly, though Thomas clearly had his reasons.

Why Lottery Winners Declare Bankruptcy

The truth is that his situation is actually not unusual in the sense that many lottery winners end up with less money after they hit the jackpot than beforehand. This can be due to a number of factors.

  • Winning the lottery in the middle of a Chapter 7 filing: Luck is a cruel mistress and can turn at any moment, and it’s very possible to win the lottery just as you’re in the midst of filing for bankruptcy. The entire point of Chapter 7 or Chapter 13 is to discharge debt you can’t afford to pay by claiming a lack of assets and ability to pay, and forfeiting eligible assets you already have. The way it works when you suddenly come into a large sum of assets, if you played the ticket before you file for bankruptcy, the winnings should legally be declared on your bankruptcy schedules. No state has exemptions for lottery winnings, but there are other exemptions for personal property you should review by speaking with a qualified attorney.
  • Getting carried away with spending sprees: If you’re someone who’s never had money to spare, it’s easy to get carried away with spending sprees. Instead of considering lottery winnings as a way to get a leg up on life, when winners hit the jackpot, that mindset changes. They sometimes picture themselves as celebrities with an infinite amount of cash, but in reality, lottery winnings can be a fraction of what they seem like in terms of how much tax is taken out and the true meaning of having that extra money. 


In Thomas’ case, he didn’t go on a spending spree. He made a few good decisions and a few bad ones, but even then, he ended up filing for bankruptcy. Sometimes that might be your only workable option, depending on your individual situation. The exact circumstances of Thomas Markle’s case remain unknown to the general public.

Finances Impact the Family

What is known, however, is that Thomas Markle tried to put his children in a position to succeed later in life. That can be expensive and can leave parents and guardians with little left over once those expenses are taken care of.

Lottery winnings, bankruptcy, unsuccessful business ventures – though they may be titillating to read about, these are things that can happen to anyone. Bottom line, life gets in the way for people from all walks of life, which is why it’s best to deal with finances head-on — the good times and the bad – so that it doesn’t lead to strained family relationships. If Markle had been blessed with better legal guidance and advice, would his situation be different today? Would he have a better relationship with his family? Unfortunately, the truth about that may never be known.

Have Questions About Bankruptcy?

If you have questions about bankruptcy or need to declare it a second time, you don’t need to be related to the British royal family to do so. For ordinary, real-life people, the first step is to contact Van Horn Law Group today to speak with an attorney free of charge to get started. This will give you a much better sense of what your legal options are. Before proceeding with a bankruptcy or even deciding if it’s the right option for you, register for a free consultation today.

You may not be the father of the Duchess of Sussex, but your finances might be just as complicated! Contact Chad Van Horn today to speak with an expert who can guide you through your options and make a choice that’s in your best interests.

About Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

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Chad Van Horn

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