The news comes as payday loans firms face a crackdown from regulators.
Katona, who also declared herself bankrupt in 2008, filed a petition at Wigan Crown Court yesterday (2 July).
A spokesperson for Cash Lady says: “We were sorry to hear about Kerry’s current financial situation. Clearly, as a business, we are committed to responsible lending, so it is with sadness that we will not be able to continue using Kerry as the face of Cash Lady. We enjoyed working with Kerry a lot, and we wish her all the best in her future endeavours.”
He added the company was “considering all options” for future marketing and did not rule out replacing Katona with another celebrity ambassador.
One of the loan firm’s ads starring Katona was banned by the ASA in May for making “misleading” claims and irresponsibly promoting its services as a way to fund a celebrity lifestyle.
In the ad she referred to her own well publicised money troubles saying: “We’ve all had money troubles – I know I have. You could see your bank and fill in loads of forms, but there is an easier way to get a loan”.
Meanwhile, regulators, Government ministers and loans firms met yesterday (2 July) to discuss the problems facing the sector and potential new regulations to make ending more responsible.
THe Financial Conduct Authority which will take over the regulation of the loans sector in April 2014 is considering an ad ban as part of stricter rules to govern payday loans firms such as Wonga and Cash Lady.