Another Bankruptcy Declaration on the Horizon for President Trump?

Another Bankruptcy Declaration on the Horizon for President Trump?

by Tucson Bankruptcy Attorneys at Arizona Zero Down Bankruptcy, PLLC

In the upcoming 2024 presidential election, the probable Republican candidate has found himself once again embroiled in controversy. Donald Trump is making headlines due to an $83 million defamation judgment against him. This legal judgment stems from a court finding that the former president defamed E. Jean Carroll by falsely denying sexual abuse allegations dating back to the 1990s. The $83.3 million judgment comprises $11 million designated for a reputational repair campaign for Carroll and $7.3 million to address the emotional harm caused by Trump’s defamatory statements. With this sizable lawsuit debt looming, some speculate that Trump might resort to filing for bankruptcy.

 A person writing on a document at a desk with scales of justice in the background, indicating legal work possibly related to bankruptcy in Tucson, AZ

Possible Indications That Could Indicate a Bankruptcy Filing in the Near Future?

In 2019, New York enacted a law allowing rape victims to pursue civil suits for damages beyond the statute of limitations. Carroll filed a suit under this law, resulting in a $5 million award against Trump for liability. Subsequently, a jury in the defamation lawsuit awarded her an additional $83 million, as Trump had previously labeled her allegations as a hoax and a lie. Trump has announced his intention to appeal the decision, but the significant judgment remains a financial challenge.

This judgment is substantial on its own, but it is only one of Trump’s legal battles. He faces a civil fraud trial in New York involving $370 million in illegal profits. If the verdict goes against him in this case, his total debt could exceed $400 million. While Trump mentioned having around $400 million in liquid assets in a deposition last year, some estimates suggest his liquid assets could be over $600 million. Additionally, he faces four separate criminal prosecutions encompassing 91 total offenses, and the legal fees for these matters are likely substantial. Trump’s campaign finances are separate from these assets, and he may need to place funds in escrow during pending appeals, potentially requiring him to submit 110% of the judgment. This amounts to roughly 15% of his net worth, making bankruptcy a conceivable option to protect his wealth.

A History of Trump Bankruptcy Cases

If Trump resorts to bankruptcy due to these recent lawsuit judgments, it wouldn’t be the first time. Given his diverse business ventures, Trump’s bankruptcies have been filed under various entities.

Trump has had at least six companies declare Chapter 11 bankruptcy:

  • In July 1991, the famed Taj Mahal Hotel filed for Chapter 11 bankruptcy.
  • In 1992, two of his casinos declared bankruptcy.
  • The Plaza Hotel in New York also filed for bankruptcy in 1992.
  • Trump Hotels and Casinos Resorts faced a second bankruptcy in 2004.
  • Trump Entertainment Resorts declared bankruptcy in 2009 due to economic factors stemming from the 2008 recession.

All of Trump’s bankruptcy cases thus far have been Chapter 11 bankruptcy cases. Chapter 11 bankruptcy allows individuals and businesses to address overwhelming debt while continuing to operate. Creditors play a significant role in Chapter 11 bankruptcy through a creditor committee. It’s worth noting that even individuals like Rudy Giuliani, Trump’s former attorney, have turned to Chapter 11 bankruptcy after facing defamation lawsuits. Large organizations such as Catholic churches and the Boy Scouts of America have also used Chapter 11 to manage class action lawsuits and substantial judgments.

Other Presidents Who Declared Bankruptcy

It’s interesting to note that Donald Trump is not the only U.S. president who has faced bankruptcy:

  • Abraham Lincoln, our leader during the Civil War, struggled with failed business ventures before entering the legal profession. He even had to sell his horse due to financial difficulties.
  • Thomas Jefferson, the third president, faced bankruptcy due to extravagant living and bad loans, leading to the sale of his estate in 1831.
  • James Monroe, the fifth president, dealt with family mismanagement of a plantation, which resulted in pressure from creditors. He discharged $30,000 in his bankruptcy filing, equivalent to nearly a million dollars today.
  • Ulysses S. Grant, known for his role as a general during the Civil War, was defrauded of several million dollars, leading him to publish his memoirs to provide for his family.
  • James Madison had agricultural investments that drained his funds through property maintenance and bailing out his stepson from gambling debts. He also sold slaves as part of his bankruptcy filing.
  • William McKinley, unlike many other presidents, did not come from a wealthy background. He went bankrupt after co-signing a loan for a friend who couldn’t repay it during the Great Depression.

Seeking Professional Guidance for Bankruptcy in Tucson and Pima County, Arizona

These examples demonstrate that bankruptcy is not exclusive to the rich and powerful. If former U.S. presidents have benefited from debt relief, ordinary individuals can as well. Various forms of bankruptcy are available to address different financial situations. While Trump may opt for Chapter 11 bankruptcy, most individuals find Chapter 7 or Chapter 13 bankruptcy more suitable, depending on their circumstances and state-specific qualification requirements.

To navigate the legal complexities of a personal bankruptcy filing, it’s advisable to consult with an experienced bankruptcy attorney like Tucson Bankruptcy Attorneys. Such legal counsel can help protect your assets and ensure a smooth filing process. Don’t assume that you can’t afford quality representation; many clients can file for bankruptcy with no upfront costs using a zero-down bankruptcy payment option. Moreover, a 0% interest payment plan can aid in rebuilding credit following a bankruptcy discharge. If you’re in Arizona and interested in exploring bankruptcy options or understanding the process further, you can contact us or call us at 520-307-0020 for additional information about Tucson Debt Relief.

2 East Congress Street, Suite #900-6A
Tucson, AZ 85701

Office: (520) 307-0020