Businessman and former American President Donald Trump has expressed himself as one of the savviest businessmen and politicians in American history. But he hasn’t always done well with his funds, as he has filed for Chapter 11 bankruptcy six times in the past.
How Can He File So Much?
The reason Donald Trump has filed for Chapter 11 bankruptcy six times is that the practice focuses on reorganizing debts. A Chapter 11 bankruptcy entails a debtor proposing a reorganization plan to keep the business running while also paying off debts.
A business can still operate while under Chapter 11 bankruptcy, but it will do so under the supervision of a bankruptcy court. The business must provide a corporate budget and a plan for paying off those debts. The effort can include a schedule for when someone will pay off everything.
The Chapter 11 process is different from a Chapter 7 or 13 bankruptcy, as Chapter 7 entails liquidating one’s assets. A Chapter 13 declaration is for personal purposes and is for debtors who have some sort of disposable income and does not entail liquidation.
Multiple Bankruptcies Can Occur At Once
Three of Donald Trump’s six Chapter 11 bankruptcies occurred in 1992. He declared bankruptcies on two Atlantic City casinos that he operated and a third on his Plaza Hotel property in New York City. These three bankruptcies entailed separate plans for how Trump would manage the debts he owed for these individual properties. A Chapter 11 bankruptcy will focus on a single business item, although some people may combine multiple assets in the same declaration.
You Can Recover After Bankruptcy
Donald Trump would declare Chapter 11 bankruptcy two more times after 1992, with the most recent being in 2009 when he declared bankruptcy on his Trump Entertainment Resorts business. But Trump continues to own various prominent and profitable assets to this day. His financial struggles didn’t seem to hurt him when becoming one of the world’s most powerful political figures.