Bankruptcy in the United States serves to “relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start a fresh free from the obligations and responsibilities consequent upon business misfortunes” and to provide Americans “a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt.” Local Loan Co. v. Hunt, 54 S.Ct. 695 (1934).
There have been many great figures in history who took advantage of the fresh start that the bankruptcy laws provide for. Perhaps one of the greatest is Abraham Lincoln. Considered by many historians to be America’s greatest president, good fortune did not always smile upon Abraham Lincoln.
At age 22, Lincoln arrived in New Salem, Illinois where he earned a living doing odd jobs around the village and working as a shopkeeper. In 1832, the shop where he worked went out of business. Lincoln and a partner opened their own general store in New Salem. They purchased their inventory from other stores on credit and incurred a great deal of debt.
In 1833, the shop failed and Lincoln’s partner died, leaving him saddled with the debt. Lincoln declared bankruptcy later that year. Fortunately for debtors today, the bankruptcy laws now provide for the discharge of most unsecured debt. However, Abraham Lincoln took nearly 17 years to pay off the debt from his failed shop.
Obviously, Abraham Lincoln overcame his financial obstacles. However, many people who should consider filing for bankruptcy do not even see it as an option because of the conditioning that bankruptcy is the worst thing that can happen to them and should only be turned to as a last resort.
But in reality, bankruptcy is the best option for a lot of people. Lincoln is historical proof that people can overcome personal bankruptcy and achieve great things in their lives. In fact, Lincoln helped a number of people declare bankruptcy in his law practice.
Bankruptcy, in most situations, can completely clean the slate of credit card bills and other unsecured debt. And, thanks to bankruptcy exemptions, most people do not lose any of their property in bankruptcy.
People living with the “weight of oppressive indebtedness” can get the fresh start that the bankruptcy laws intend, and move on with life to achieve all of their financial goals.
Filed under: Famous Bankruptcies
Like this post? Subscribe to my RSS feed and get loads more!