Considering Bankruptcy? These American Presidents Have Also Filed

RyanD
July 27, 2012

Credit problems are always a challenge. At first, you try to get your finances back on track. But that gets more difficult as creditors begin to report late payments and collections. The phone rings from morning until night with collection agents either demanding immediate payment or making you feel guilty about the debt.

It’s time to make some tough choices. Consolidation loans may grant temporary relief, but only add more debt and fees in the long run. Debt relief services have worked for some people, but the plans may take years to complete, and most people fail when unforeseen circumstances such as unemployment or medical emergencies arise. Bankruptcy can give you a fresh start in just a few months, but most people worry about social and financial consequences.

Bankruptcy laws were established to give debtors a fresh start, and many people have recovered from bankruptcy to enjoy great success, including four American Presidents.

Thomas Jefferson

As one of the Founding Fathers of our country, Thomas Jefferson was revered for his leadership and wisdom. However, that wisdom may not have extended to his financial habits, as he spent most of his life overwhelmed by debt.

At the age of 82, after spending huge personal sums to entertain foreign visitors during his Presidency, Jefferson declared “I must sell my house and all here and carry my family to Bedford where I have not even a log hut to put my head into.” When Jefferson died, he was more than $100,000 in debt

Abraham Lincoln

One of America’s most respected Presidents spent seventeen years paying off debts after a failed business venture. Lincoln had been in partnership with another man, and they expanded by buying goods on credit. After the partner died, Lincoln became liable for the entire debt. In fact, historians report that after he was elected to the state legislature, Lincoln’s horse and saddle were repossessed.

Lincoln was quoted as saying that debt was his life’s biggest obstacle, and practiced bankruptcy law before being elected President.

Ulysses S. Grant

Ulysses S. Grant is another President who declared bankruptcy after being victimized by a business partner of his son in an investment banking Ponzi scheme.

William McKinley

While in office as Ohio’s governor in 1893, William McKinley went bankrupt with over $130,000 in debt. With help from friends, he was able to repay his debts and won the Presidency just three years later.

Could a modern Presidential candidate win an election with a history of bankruptcy? A lot would depend upon the circumstances. For example, would the candidate be perceived as “at fault” for excessive spending? Could the candidate “spin” his personal experience into a plan to solve the country’s economy? Will voters with similar financial challenges feel a rapport with the candidate?

While some modern politicians such as George McGovern and John Connally have joined the ranks of famous people who have declared bankruptcy, bankruptcy would certainly be a political liability, especially at the national level.

During the 1800s, bankruptcy laws were far more restrictive than they are today. It took years to recover financially from a bankruptcy, and most of the creditors of the former presidents were eventually repaid. Today, most bankruptcies discharge the majority of debt within a few months and allow the debtor to make a fresh financial start without repayment.

In fact, the biggest mistake most debtors make is waiting too long to declare bankruptcy, often enduring months or even years of bad credit and creditor harassment. Consulting a knowledgeable bankruptcy attorney can help get you the facts you need to make the best choice for your family’s future. Kramer Law Firm is able to assist with Orlando mortgage foreclosure and bankruptcy concerns.