Abraham Lincoln, sixteenth President of the United States of America had to declare bankruptcy in 1833 due to failed business. In his early twenties Lincoln worked around town doing whatever small jobs he could find as well as working at a general store. When the shop where Lincoln worked closed down, Lincoln decided to make money opening his own general store. Along with a friend, Lincoln opened a general store in New Salem, Illinois. Lincoln and his friend bought out other stores’ inventories on credit, thinking of making a profit after re-selling the goods.
Unfortunately for Lincoln, even though the economy was booming his own store’s sales were dismal. As debts mounted, Lincoln had to sell his stake in the store. Later, his business partner died, and the future President became liable for $1,000 in back payments. Lincoln didn’t have modern bankruptcy laws to protect him, and so his creditors sued him and took his two remaining assets: his horse and some surveying gear. He was required to repay his creditors over a period of 17 years, much longer than the maximum requirement in a Chapter 13 today, which is 5 years. If the bankruptcy occurred now, it is likely that Lincoln could have kept those assets as well as discharged his debts.
Abraham Lincoln’s bankruptcy issues prove that even the most famous people in America are not immune to bankruptcy.