Will Seven Bankruptcy Cases Be a Charm for this U.S. President?

It’s hard to watch or read the news without being barraged with the latest headlines about former president Donald Trump. Whether it’s a scandalous social media post or a fiasco in a courtroom, you can always count on Trump to create situations that you never imagined would come from one of our country’s leaders. While being known for his business acumen, Trump, through his various companies and brands, has declared bankruptcy six times. With a recent defamation judgment stemming from a sexual assault conviction and another pending judgment for fraud, Trump will potentially owe hundreds of millions of dollars. This amount of debt has pressured several major names to declare Chapter 11 bankruptcy in the past. Some experts predict that these recent rulings against Trump will send him back to bankruptcy court for the seventh time. Bankruptcy is available in every state, although the protections and limitations can vary by state. To learn more about the specifics for Nevada, call 702-899-3328 for your free consultation with our firm.

What Happened This Time?

While it has been a few years since the American people said, “You’re fired!” to a Trump presidency, he hasn’t gone quietly. His former lawyer, Rudy Giuliani, recently declared bankruptcy after a defamation judgment based on accusing Georgia election workers of rigging the 2020 presidential election. Trump has also recently had a ruling against him for defamation, but surprisingly, it does not stem from his reaction to the presidential election results. Instead, Trump was found liable for sexual abuse of a woman named E. Jean Carroll in the 1990s. She was able to bring a claim against him due to a law being passed in New York that extended the statute of limitations for sexual assault victims. A civil jury ruled in her favor and ordered Trump to pay her $5 million. However, he went on to portray her in the media as mentally unstable and a liar, saying that the sexual abuse lawsuit was a hoax. Predictably, this incensed his supporters, some so much that they reached out to Carroll with death threats. This led to her filing a defamation lawsuit against Trump for repeatedly and publicly disclaiming the prior court of law’s ruling. Again, the jury ruled in Carroll’s favor. This time, the damages were much higher.

Punitive damages are meant to punish the defendant to discourage them from behaving similarly in the future. The amount that it takes for a party to feel a negative reaction can vary based on their financial resources. Because Trump is wealthy, the jury issued a high award to incentivize him to stop defaming the plaintiff. Here, the jury ordered that Trump pay Carroll an additional $83.3 million.

This is far from the only legal matter in which the former president is involved. He has been accused of fraud in New York, inflating his net worth to take advantage of more favorable interest rates from lenders. New York has a repeated fraud statute that can completely wipe out a company that violates it. New York Attorney General Letitia James has requested that Trump be banned from running businesses in New York and pay a fine of $370 million.

Why This Might Mean Another Bankruptcy

Trump has stated in depositions related to his civil fraud trial that he has assets over $400 million. These assets are completely separate from finances supporting his 2024 campaign for presidential re-election. If Trump’s appeals are unsuccessful, almost all of his liquid assets would be eliminated by these judgments. Additionally, Trump has been known to turn to bankruptcy when his financial situation became overwhelming in the past. His chain of bankruptcy filings all began when he acquired 3 casinos in the 1980s. It took about a decade for these casinos to struggle enough that Trump couldn’t pay his debts. The Taj Mahal declared Chapter 11 bankruptcy in 1991. This filing was followed by both the Trump Plaza and the Trump Castle declaring bankruptcy in 1992. The Plaza Hotel also filed for bankruptcy in 1992.

The next decade was relatively quiet. His prior Chapter 11 bankruptcy filings led to a new casino company under a restructuring agreement. Trump didn’t have another bankruptcy filing until the new millennium. His post-bankruptcy casino company went bankrupt in 2004. This post-post-bankruptcy company was restructured into a new one which also declared bankruptcy in 2009. Chapter 11 bankruptcy isn’t an uncommon response to a large lawsuit verdict, and Trump has already shown that he is not afraid to file. If Trump files for bankruptcy to protect his assets, his campaign finances shouldn’t be a part of the bankruptcy.

Other Famous Figures that Have Filed for Bankruptcy

Trump has been known as both an entertainment and political figure and members of both industries have filed for bankruptcy in the past. Thomas Jefferson, James Madison, Abraham Lincoln, and Ulysses S. Grant are all former U.S. presidents who used bankruptcy or the closest thing resembling it in that time. While rappers are known for boasting extravagant lifestyles, 50 Cent, DMX, and MC Hammer all have filed for bankruptcy. Many famous athletes have declared bankruptcy, including Mike Tyson, Dorothy Hammill, Jose Canseco, Terrell Owens, and Michael Vick. Other celebrities that have filed for bankruptcy include Alex Jones, Abby Lee Miller, Francis Ford Coppola, Toni Braxton, Cyndi Lauper, Janice Dickinson, Kim Basinger, Wayne Newton, Meat Loaf, Tom Petty, Drake Bell, Mick Fleetwood, and Perez Hilton. Clearly, anyone who is thinking about bankruptcy can see that plenty of intelligent and talented people filed for bankruptcy. If you are thinking about filing for bankruptcy in Las Vegas, you can discuss your options with your free consultation by calling 702-899-3328.

Considering a Las Vegas Bankruptcy? Weigh Your Options with a Free Consultation

If someone as famous and powerful as Donald Trump can benefit from bankruptcy six- or possibly even seven- times, an average individual shouldn’t feel ashamed to seek court protection from bankruptcy either. Many people’s financial situations have been turbulent with a period of such sharp inflation immediately following a pandemic that upended the global economy. Bankruptcy could provide a way to stabilize your situation, wipe the slate clean, and allow you to improve your finances and credit. Bankruptcy isn’t the death sentence that some portray it to be it didn’t stop the American people from electing a man who had filed six times over as president.

The good news is that your potential bankruptcy case will likely be far less complicated than a Trump bankruptcy. Most individuals, also known as consumers in a bankruptcy context, have their needs met by Chapter 7 or Chapter 13 bankruptcy. Chapter 7 liquidates debts, and Chapter 13 reorganizes them into a payment plan. Each has its benefits and drawbacks. You must also ensure that you qualify based on Nevada’s limitations before filing a petition under either chapter. Our skilled team at Henderson Bankruptcy Lawyers can discuss your situation in a free consultation and help you determine the best course of action. To get started with your free consultation with a bankruptcy attorney, call 702-899-3328.