(MONEY Magazine) – When Burt Reynolds, star of television's recently canceled Evening Shade and the Smokey and the Bandit movies, abruptly quit his promotional tour for his autobiography My Life temporarily in October, he said "business opportunities demand my immediate attention." No kidding. Court papers and news reports have exposed the source of Reynolds' angst: He's $11.8 million in debt, so says the Palm Beach Post, and desperate to reduce or abolish his $132,000-a-year alimony payments to ex-wife Loni Anderson. "What we really need is some breathing room," says Bob Montgomery, who is Reynolds' attorney.

Reynolds' money worries began with his and Anderson's dynamic spending habits. The Post reported that they spent $1.5 million a year, including $100,000 on toupees (he's now even a company vice president) and $10,000 for a custom-made rocking horse for his six-year-old son Quinton. In the settlement, Loni got the bronze Puss 'n' Boots statue; Burt got the white baby grand.

In addition to his eccentric spending, Reynolds has mangled his money through lousy business deals. An ill-fated restaurant venture left him personally responsible for $28 million in debt because he failed to incorporate, an oversight he discovered only after the restaurants went belly up in 1988 and the creditors came after him personally. In a subsequent deposition, Reynolds said he had not read any of the contracts that held him liable for equipment and costly 20-year leases.

The moral for mere mortals: If you're starting your own business that will take out loans, set it up as a separate entity, advises Sondra Taggart, a Beverly Hills certified financial planner. "Never handle the liability yourself," she says. One more thing: Try to keep your rocking horse purchases under $10,000.

--Frank Swertlow