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Presidents Who Have Filed Bankruptcy

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If you’re feeling burdened by debt and you think that you’re alone, think again.  Some of history’s most well known people; celebrities, politicians and other world leaders have found themselves facing financial hardships. Even several Presidents have found themselves in serious financial trouble.  Below I’ll list several U.S. Presidents who have filed bankruptcy either before or after they left office.

Thomas Jefferson

Thomas Jefferson was a brilliant lawyer, a gifted writer and a wealthy landowner but Jefferson wasn’t the best at managing his finances. His main occupation was that of a farmer.  Due to this he suffered the ups and downs that often go with the unpredictable nature of agriculture. He also used his considerable wealth to lend out money and the payments made against those loans were often unreliable. He also inherited debt from his father-in-law and from a friend who did not pay off a debt that Jefferson had co-signed. Jefferson also had problems with his spending.  Jefferson’s love of luxury led to expensive spending habits as well and he died with more than $100,000 in debt (roughly 2-3 million dollars in today). However, unlike today, he didn’t have the option to file bankruptcy except during a brief window from 1800 to 1803, which he did utilize. Thomas Jefferson died broke and unable to pass along any assets to his heirs and was even unable to free his slaves at his death as they were considered property and were auctioned to settle his debts but Jefferson wasn’t the last of the Presidents who have filed bankruptcy.

Abraham Lincoln

Abraham Lincoln, one of our greatest presidents, found himself in the soup financially after the failure of a business venture. Lincoln even found himself having to assume more than half of the debt from this failed venture when his partner in the business died shortly after the business shut its doors. Lincoln, out of a sense of duty, assumed the debt and struggled for some time with it. Lincoln lost all of his assets and he spent several years trying to pay off the debts. Despite all this hardship, Lincoln was undaunted and didn’t allow the stigma of bankruptcy  to follow him for years on end. Just a mere 8 years later, Lincoln was elected to Congress and in 1860 became President of the United States. Lincoln had trouble with his finances for the rest of his life largely due to his wife’s extravagant spending habits which she carried over even after his death in 1865.  Lincoln was one of the first Presidents who have filed bankruptcy

Ulysses S. Grant

Grant was a Civil War hero who many credit with saving the Union, right along with Abraham Lincoln. As good as Grant was on the battlefield, he was an awful businessman. Grant, with his judgement often clouded by his alcoholism, made a series of bad investments. Grant invested heavily in Grant & Ward, a Wall-Street investment company set up by his son and his son’s friend Ferdinand Ward. Ward stole and embezzled the funds Grant invested, eventually going to jail for it. This didn’t change the fact that the President was still on the hook for hundreds of thousands of dollars of debt after Grant & Ward failed and he went bankrupt. Ulysses Grant worked nearly until his dying day writing his memoirs and only way he was able to repay any of his creditors was through selling his Civil War memoirs which were published posthumously.

William McKinley

William McKinley was a lawyer like Thomas Jefferson and like Jefferson, McKinley cosigned on a debt for a friend.  When this friend decided to bankrupt on the debt, McKinley was forced to take over the debt as a co-signer. All of this occurred shortly after his election as Governor and he was forced to declare bankruptcy while serving as the Governor of Ohio.  Bankruptcy wasn’t all bad for McKinley. Less than three years later, he was elected President of the United States.

Donald J. Trump

Donald Trump is a businessman who inherited the business his sons now manage called the Trump Organization in the 1970s when his father retired from the business.  While Trump did see a great deal of success as a real estate investor, perhaps his biggest failure was as the owner of several Atlantic City Casinos during the late 1980s and early 1990s.  Trump’s casino, the Trump Taj Mahal, found itself 3 billion dollars in debt with Trump personally guaranteeing nearly 1 billion dollars worth of the debt personally.  Trump was forced to sell off several pieces of personal property including a yacht and an investment in an airline to satisfy the debts and even then he was forced to make payments on the debt for several years after due to debts that weren’t discharged in the bankruptcy. While Donald Trump is the most recent of the Presidents who have filed bankruptcy, I’m sure he won’t be the last. 

 

Even great people find themselves overwhelmed by debt. Whether that’s due to failed businesses, a job loss, medical emergencies or illness, or just bad luck. Bankruptcy is a resource that can help you get back on your feet and give you a fresh start if you, like these Presidents, find yourself in over your head. Call us today to learn what your options are!

Why does Bankruptcy Exist?

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Why does bankruptcy exist?  I can tell you from more than 10 years of legal experience, that is the question most often asked by creditors who are baffled as to why they lose out when someone files bankruptcy against a debt that is owed to them.  While it can be unfortunate for the creditor, for the person needing protection that bankruptcy offers, the choice is stark.

First, let’s look at a little bit of the history of bankruptcy.  For hundred of years, if you couldn’t pay back your debts, your assets were often seized to satisfy those debts and if you didn’t have enough assets to cover the debts owed, you’d be thrown in jail.  While this doesn’t make much sense, being that if you’re imprisoned you can’t exactly work to pay off your debts, it was the law in Great Britain and even in colonial times here in America. This all changed with the Financial Panic of 1837.  This was the first time that debtors were able to file for bankruptcy protection voluntarily. Changes have occurred over the past 180 years that have made bankruptcy fairer for the debtor and the creditor.

At times, a person’s debts can become so overwhelming that they become paralyzing.  Debts can feel like a type of financial bondage that steals a person’s hope for future prosperity and ability to take care of his or her family.  From my ten years of experience, I have found that none of my clients actually want to file bankruptcy and all of them desperately want to have the financial capacity to repay their creditors. Unfortunately, they have reached a point in their life where they feel that this is simply impossible.

This is where bankruptcy becomes a type of safety net.  The reasons for bankruptcy are numerous. First, bankruptcy serves to provide a debtor with a fresh start and renewed sense of hope.  The Supreme Court has stated that this fresh start is the “essence of modern bankruptcy law” and that debtor is provided with special protections in bankruptcy called exemptions “to ensure that bankruptcy will provide a fresh start.” Local Loan Co. v. Hunt, 292 U.S. 244 (1934).

From the perspective of macroeconomics, bankruptcy is an essential part of capitalism. In an economy without bankruptcy protections if a business fails you’re out of luck but in our country bankruptcy can serve as a fail safe.  Without this fail safe what business person would ever take a risk with his or her money? It is obvious that no one starts a business just to file bankruptcy, bankruptcy itself provides for an invaluable safety net that will allow a person to take the debts from the past and move forward into a brighter future.

Many creditors often ask, what about me?   While it is not obvious why bankruptcy would benefit creditors, creditors are protected by the law as well.  First of all, we assume that a person who is looking at filing bankruptcy has exhausted all other financial options.   For the most part, debtors generally don’t have much more than their household goods and furniture, a car, and a home, if they’re lucky. The reality of the situation is, no one is going to get paid back in full. By assuming bankruptcy is unfair for creditors, must also acknowledge that the alternative probably wouldn’t be better either.

Understanding all this we realize that bankruptcy is an equalizing force among creditors. Creditors are broken up into roughly three different classifications: The first is secured creditors like your mortgage or car loans, the second is a priority creditor like alimony or child support, and the third is just unsecured like a credit card or medical bill.  An example of this works would be a situation like this. A debt collection law firm is attempting to collect on a credit card issued by a bank and the debt collection law firm pursued a garnishment suit against the debtor in magistrate court. They won and got a judgment, and started garnishing the debtor’s paycheck to the fullest extent allowed by law.  By doing this the debt collection law firm collected $1,500.00 in three months for the bank.  The problem with this is that there is a section of the bankruptcy law that says that if an unsecured creditor is paid more than $600 within 90 days of the debtor filing bankruptcy (even if it’s court ordered), that creditor was given preferential treatment.  This means that the bankruptcy trustee can force the bank to turn over the $1,500 so the trustee can distribute that money to the unsecured creditors in equal shares. So, from that perspective, even creditors may benefit by some equalization under the bankruptcy code.

With all this said, I hope I’ve answered the question, Why does bankruptcy exist. It exists for both the creditor and the debtor.  It helps to ensure fair treatment of the creditors and to help the debtor get a fresh start. If you feel that you may be in need of a consultation with a bankruptcy attorney give the caring and compassionate attorneys at Harmon and Gorove a call to schedule a free, no obligation consultation with an experienced bankruptcy attorney. With our expertise you may be able to regain your financial freedom and start down the road to prosperity.

What About My Life Insurance?

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A life insurance policy is one of the most important assets you can invest in.  Life insurance often provides a monetary safety net for families facing the prospect of losing a parent or spouse to keep them from facing financial hardships.  If bankruptcy appears to be on your radar it is imperative that you tell your attorney about any and all life insurance policies, you hold and what types of policies they are.

A good number of assets are not subject to be taken in bankruptcy and others can be protected, including your life insurance.  Protecting your life insurance is something that can easily be done but you have to notify your attorney about these policies before the case is filed in order for the attorney to make the necessary adjustments. In the event that your policy is whole life with cash value, it is imperative that your attorney know the actual cash value amount of your policy to ensure that you can cover that amount with your exemptions when you file for bankruptcy protection. If you are thinking about filing bankruptcy, you’ve already made a positive choice to improve your family’s financial position.  If you’re someone who doesn’t have life insurance, purchasing a policy can be another wise financial decision you can make after your bankruptcy is concluded.

Whether you must protect a life insurance policy or not, if you think bankruptcy is an option, make an appointment to speak to one of the experienced bankruptcy attorneys at Harmon and Gorove to find out more about how bankruptcy can be the first step toward renewed financial success.  The decisions you make today will make a world of difference in your and your family’s financial future.  At Harmon and Gorove, we have helped thousands of individuals and families file both Chapter 7 and 13 bankruptcies.  Our clients have often weathered severe hardship that has resulted in overwhelming debts. They made a decision to address their debt head on and give themselves the fresh start down the road of financial freedom.

If you are interested in learning about your options through bankruptcy, make an appointment to speak with one of the experienced bankruptcy attorneys at Harmon and Gorove today.  Call us today at 770.253.5902 for a free consultation with a professional and compassionate bankruptcy attorney.

Stopping Creditor Harassment

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Not much is more stressful that feeling the heavy burden of unmanageable debt. When you add the prospect of non stop harassment by creditors on top of the burden of debt the situation becomes unbearable.  People who have been victims of creditor harassment and bill collectors know how uncomfortable it is when the phone rings, especially when it keeps rings all day long. A number of people assume there isn’t a way around being constant creditor harassment, there are provision in the law to make it stop.

What you have to do first is to realize that doing nothing will not fix the problem. The sad reality of it is that collection agencies have hundreds of staff members whose sole job is to make phone calls and harass you into paying a debt that you may not even owe. The question is, how do I make it stop?

Creditor Harassment: know your rights

You DO NOT have to accept being bullied by collection agencies. One thing you have to understand is that while they may be rude to you and harass you, you are not under their control. Don’t ever scream at them, lose your temper or threaten them; always keep a level head.

You must remember that you have rights that they absolutely must respect. There are a number of things that collectors can’t do when attempting to collect debts. They are not allowed to call before 8 a.m. or after 9 p.m. unless you have given them permission to reach out to you at those hours. You should always establish boundaries on the very first phone call. You also have the right to tell them they are not allowed to contact you at work or reach out to your family. Finally, and most importantly, if you wish for the calls to cease, you can tell them not to contact you.  Once you have completed the phone call send a follow up letter via certified mail asking for proof that you explained to them how they should contact you in the future. Under Federal law all notices must be in writing to retain full legal effect.

You are protected by the Fair Debt Collections Practices Act. Under the Fair Debt Collections Practices Act, creditors are not legally allowed to do the following:

  • Repeatedly call you
  • Call you at unreasonable hours or late at night
  • Call your employer if you’ve told them not to
  • Call without identifying who they are
  • Contact your friends, family or neighbors unless you give them permission
  • Employ deceptive tactics
  • Threaten you with child custody, arrest, or loss of welfare benefits
  • Threaten with self-help repossession when not authorized by the law
  • Use derogatory, obscene, or insulting remarks
  • Directly contact you after you’ve told them to call your lawyer instead

Always make sure you receive proof of debt

Don’t just assume that you owe a debt to someone just because a debt collector has called you. The cold hard truth is that you should never pay the collector anything until they can prove that you actually owe the debt. Debt collectors often try this tactic to scare people into paying a debt by mistake. If the company calling you is unable to provide you with real proof of the debt you can simply tell them to stop calling you. .

I would even go so far as to say that even if you are pretty sure that you owe the debt, make them prove it to you anyways. As I have previously stated, sometimes debt collectors try to collect on fraudulent debt. Additionally, third party debt collectors often buy debt without ever receiving proof that someone owes it. This situation gives you a huge leg up and can often times result in you not having to pay the debt.

You should always be honest. If there isn’t any way you can pay the debt tell the person who called you the truth. If you think there may be a time when you’ll have some money then give them an estimated time when you might be able to pay. By doing this you could eliminate the incessant phone calls.

You can try to make a deal

There are some creditors that are not impossible to work with.  They may be inclined to make a deal with you. Some companies may allow you to make small payments over time or they may forgive a portion of the debt they say you owe if you’re willing to pay right then.  Generally speaking, third party companies are usually more willing to work with you since they often buy debt in bulk for much less than it was previously worth.

If all else fails, see a lawyer

If you feel you’re a victim of creditor harassment and you can’t find a way to get them to stop contact the Attorneys at Harmon & Gorove today.  We can assist you in filing bankruptcy so that your creditors will stop harassing you, ruining your credit and garnishing your wages.

Timing Bankruptcy: How Often Can I file?

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Timing Bankruptcy is very important and can have an impact on when and what types of cases you can file. The first thing you must realize is that there isn’t a set number of times a person can file for bankruptcy in their life, if you’re eligible to file, you can do it.  Just because you CAN file 5 or more times in your life, doesn’t mean you can actually get what is called a discharge of your debts. A discharge is the complete and total wipe out of your debt that comes upon completing a bankruptcy.

The biggest thing you must consider if you have to file for bankruptcy more than once in you life is timing bankruptcy correctly. If you completed a previous bankruptcy, whether it was a 7 or a 13, you have to wait a certain amount of time before you can receive a discharge in another bankruptcy. There are a number of factors that determine when and if you can file another bankruptcy and receive a discharge:

  • Which type of bankruptcy you file previously
  • When you filed the bankruptcy (ie. what date)
  • Whether your bankruptcy was completed (discharged), dismissed (voluntarily or involuntarily) or dismissed with prejudice (you can’t file bankruptcy again for a set period of time because of something you might have done.)

There are restrictions on timing bankruptcy as well.  When or whether you are eligible to discharge your debt again depends on whether you filed a 7 or a 13, when you filed that case, whether you received a discharge in that case and what kind of bankruptcy you want to file now.

  • If you file a Chapter 7 and want to file another Chapter 7: If you have filed a Chapter 7 Bankruptcy and received a discharge, you must wait 8 years to the day of the date you last filed for Chapter 7 Bankruptcy.  In other words, if you filed a Chapter 7 on May 1, 2010, you wouldn’t be eligible for another Chapter 7 until May 1, 2018.
  • If you file a Chapter 13 and want to file another Chapter 13: If you complete a Chapter 13 case and your debts are discharged you must wait 2 years from the date that your previous Chapter 13 was filed in order to file for and receive a discharge in a new Chapter 13.  This usually isn’t an issue though because it takes a minimum of 36 months to complete a Chapter 13 Plan. Generally speaking, you can file for a new Chapter 13 case pretty much immediately after your first Chapter 13 is closed.
  • If you file a Chapter 7 and want to file a Chapter 13: If you filed a Chapter 7 Bankruptcy and received a discharge, you can file a Chapter 13 case and be eligible for a discharge if the case is filed at least 4 years after the date you first filed your Chapter 7. One important thing to keep in mind is the fact that if you file a Chapter 13 after you complete a Chapter 7 and are discharged, you can still use a Chapter 13 to get caught up on debts that are of a high priority like mortgage deficiencies or missed auto loan payments even if you aren’t eligible for a discharge.
  • If you file a Chapter 13 and want to file a Chapter 7: If you completed your Chapter 13 case and received a discharge, you must wait 6 years from the date your Chapter 13 was filed before you may obtain a discharge in a Chapter 7 case.  There is an exception to this rule though. If your previous Chapter 13 was a 100% case, meaning that you paid your unsecured creditors back in full you may be eligible for a discharge in a Chapter 7.

The only way to know for sure which type of Bankruptcy you are eligible for and if timing bankruptcy correctly is in your interest is to speak with a competent and compassionate Newnan Georgia bankruptcy attorney. Our attorneys at Harmon & Gorove can offer you a completely free consultation in a judgement free and comfortable environment. We can review your current financial status and tell you exactly what would work best for your situation.  Whether it is a Chapter 7 Bankruptcy, Chapter 13 Bankruptcy or no bankruptcy at all.  We always look out of the best interest of our clients.  If you think Bankruptcy can help get your finances back on track, contact our office to schedule a free consultation today.

Someone Told Me I Can’t File Bankruptcy…

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Today, so many people are worried that once they have decided to seek help someone might tell them they can’t file bankruptcy.  Whether it is the judge, a trustee or a creditor, They fear that someone might reject their bankruptcy petition all together or tell them they can’t file bankruptcy and put the right back at square one.  The long and short of it is that the chances of this happening are very very slim. This is why you hired an attorney to begin with. Trying to file a case “pro se” might lead you down a road full of serious legal problems, but filing with an attorney is definitely the right choice.  Your attorney’s job is to guide you through the process and make sure that your situation is fully vetted. The attorney will know your entire situation so that when your bankruptcy petition is filed with the court you will be in full and complete compliance with the bankruptcy code and the local rules set out in each judge’s courtroom. Whether it is a Chapter 7 or a Chapter 13 bankruptcy, your attorney will make sure that it is smooth sailing through the bankruptcy process.  

Like I stated earlier, the road is usually smooth and clear when you hire an experienced Newnan Georgia Bankruptcy Attorney. The only time you might find yourself facing problems in your bankruptcy is when you don’t disclose your entire financial history up front to your attorney and the court.  Your mother probably used to tell you that honesty is the best policy and if she did, she was right. That proverb holds true in Bankruptcy as well. You have to tell your attorney everything that’s going on in your financial life.  Whether you had a car accident and have the potential to recover money from it, you’re going through a divorce or you are being sued for something that you may be liable for, you have to disclose this to your attorney from the start.  Your attorney is best able to serve you when they have to complete and total picture of your financial situation. When that is the case, your attorney can almost always guarantee smooth sailing all the way through your bankruptcy case.  

If you are behind on your bills, being harassed by creditors or just feel like there’s no way you’re going to get ahead, make an appointment today with one of our compassionate and experienced bankruptcy attorneys at Harmon & Gorove. We will work with you to get you a fresh start in your financial life and get your credit back on track after bankruptcy.