The likely Republican nominee for the 2024 presidential election is no stranger to being in hot water. Donald Trump’s latest reason for being in the headlines is an $83 million defamation judgment. The former president has been found in a court of law to have sexually abused E. Jean Carroll in the 1990s. His statements on the matter were found to be defamatory. Out of the $83.3 million total judgment, $11 million is meant as a reputational repair campaign for Carroll. $7.3 million is meant to address Carroll’s emotional harm caused by Trump’s public defamatory statements. Now, some predict that Trump might end up filing for bankruptcy due to lawsuit debt.
Why This Might Indicate A Bankruptcy Filing
In 2019, New York passed a law that allowed rape victims to bring a civil suit for damages despite the statute of limitations being expired. Carroll brought a suit under this law and the jury found Trump liable and issued an award of $5 million. After saying her allegations were a hoax and a lie, a jury in a defamation lawsuit awarded her an additional $83 million. While defamation verdicts are difficult to achieve, Trump was known for his unfiltered social media presence which led to Carroll being known as crazy and receiving multiple death threats. This result was reasonable to expect given Trump’s position as president. While Trump has announced his intentions to appeal the decision, the lawsuit judgment is looming.
This judgment on its own is a staggering amount. But it is far from the former president’s only legal battle. He is also in a civil fraud trial in New York over $370 million in illegal profits. If the verdict isn’t in Trump’s favor for this lawsuit, he will owe well over $400 million. Trump stated that he had approximately $400 million in liquid assets in a deposition last year, but has been estimated to have liquid assets over $600 million. Trump is also facing four separate criminal prosecutions with 91 total offenses. The legal fees for these matters are likely astronomical. Trump’s campaign finances are separate from these assets. He may need to put funds in escrow while appeals are pending, and may be required to submit 110% of the judgment to do so. This represents approximately 15% of his total net worth. Because so much of his wealth is at risk, it is conceivable that the former president might declare bankruptcy.
Trump’s Previous Bankruptcy Cases
If these lawsuit judgments force Trump into bankruptcy, it wouldn’t be the first time. Because of the various companies and brands that he owns, Trump’s bankruptcies are filed under different names. However, at least 6 of his companies have been found to have declared bankruptcy. The first was in July 1991 when his famed Taj Mahal hotel declared Chapter 11 bankruptcy. This was followed by 2 casino bankruptcy filings in 1992. His hotel, the Plaza Hotel in New York, also declared bankruptcy in 1992. Trump Hotels and Casinos Resorts filed a second bankruptcy in 2004. Next, Trump Entertainment Resorts declared bankruptcy in 2009. This was due to economic factors caused by the recession in 2008.
All of Trump’s bankruptcy cases thus far have been Chapter 11 cases. Chapter 11 bankruptcy can be used by individuals and businesses alike to deal with unmanageable debt. Businesses often use Chapter 11 bankruptcy because, unlike Chapter 7 bankruptcy, it allows the business to continue operating. Creditors are highly involved in Chapter 11 bankruptcy in the form of a creditor committee. Rudy Giuliani, Trump’s former attorney, declared Chapter 11 bankruptcy after a separate defamation lawsuit. Chapter 11 has also been used by large organizations, such as Catholic churches and the Boy Scouts of America to deal with class action lawsuits and judgments in the millions of dollars. If Trump follows suit to protect his assets after these recent lawsuits, it will be no surprise. If you want more information about bankruptcy, and especially about filing personal bankruptcy in Arizona, call 480-405-1010 for your free phone consultation with one of our experienced lawyers.
Other Presidents That Have Declared Bankruptcy
A prior bankruptcy filing might be relevant in some career paths, such as financial advising. However, it doesn’t disqualify an individual from the U.S. presidency. Donald Trump isn’t the only U.S. president who has declared bankruptcy. Some of the other presidents that have filed for bankruptcy include:
- Abraham Lincoln: Many people don’t realize that our country’s leader during the Civil War came from poverty and had several failed business ventures before entering the legal profession. He even had to sell his horse due to financial issues at one point, the modern equivalent of which may be selling one’s car.
- Thomas Jefferson: Our third president is probably more known for a lavish lifestyle than a bankrupt one. However, even someone with great wealth can end up bankrupt with an extravagant lifestyle and bad loans. This led to the sale of his estate in 1831 to James Turner Parkway.
- James Monroe: Our country’s fifth president was also considered a wealthy man. However, his family mismanaged their plantation which led to pressure from creditors. Monroe discharged $30,000 in his bankruptcy filing, which would be worth close to a million dollars today.
- Ulysses S. Grant: This president was also known for being a general during the Civil War. He was defrauded by the modern equivalent of a few million dollars, forcing him to publish his memoirs in his final days to provide for his family after his passing.
- James Madison: This president had agricultural investments but saw his funds drained by property upkeep and maintenance. He also bailed his stepson out of gambling debt. On a depressing note, Madison had slaves he intended to free and instead sold as part of his bankruptcy filing.
- William McKinley: Unlike many of the other presidents who have filed for bankruptcy, McKinley didn’t come from a rich family. He ended up bankrupt after co-signing a loan for a friend who was not able to repay it during the Great Depression.
Considering Filing Bankruptcy In Arizona? Seek Professional Guidance From Experienced Legal Counsel
You don’t have to be rich and powerful to file for or benefit from bankruptcy. If several of our country’s presidents benefit from debt relief, an average individual should be able to as well. There are different forms of bankruptcy to suit different needs, backgrounds, and situations. Donald Trump would likely file for Chapter 11 bankruptcy, but most people have their needs better served by Chapter 7 or Chapter 13 bankruptcy. They have separate qualification requirements that vary by state. A bankruptcy attorney can help you navigate all of the legal complexities surrounding a personal bankruptcy filing. Chapter Bankruptcy Lawyers can also help you protect your assets and execute your filing without a hitch.
Don’t assume that you can’t afford a quality bankruptcy attorney. Most of our clients are eligible to file for bankruptcy with no money down using our Zero Down payment option. Your 0% interest payment plan can even help rebuild your credit after a bankruptcy discharge. To see if you qualify and to learn more about bankruptcy in the state of Arizona in general, get started through our online form or call us at 480-405-1010.
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