Bankrupt

Fun Facts About Bankruptcy

• The word "bankruptcy" comes from an Italian phrase meaning "broken bench." In Renaissance Italy, when a moneylender couldn't pay debts, authorities would publicly break their trading bench in the marketplace to symbolize the end of their business.
• Julius Caesar introduced legal reforms that allowed creditors to seize property, while giving debtors a path to discharge remaining obligations. Previously, creditors could sell debtors into slavery or even physically dismember them.
• Spain's King Philip II was the first sovereign nation to declare bankruptcy. He actually did it four times, between 1557 and 1596, due to the immense cost of war against the Dutch, English and Ottomans.
• Four U.S. Presidents faced personal bankruptcy, or else had serious debt troubles:
  • Thomas Jefferson – inherited debt in 1774, made poor business investments, had an extravagant lifestyle
  • Abraham Lincoln – faced crushing debt after failed business venture when he was a young man in 1833
  • Ulysses S. Grant – defrauded of his life savings by a business partner running a Ponzi scheme in 1884
  • William McKinley – filed for bankruptcy in 1893 after cosigning loans for an old friend who went bankrupt
• About 65% of personal bankruptcies in the U.S. are linked to medical expenses. Even many insured people end up filing because of high deductibles, out-of-pocket bills, and lost income from illness.
• The largest bankruptcy in history was Lehman Brothers in 2008. They filed with over $639 billion in assets and $619 billion in debt. The collapse sparked a global financial crisis, resulting in a credit market freeze and worldwide economic recession.
• Retirement savings are usually fully protected in bankruptcy. Most filers also keep their home, automobile, and everyday essentials thanks to generous exemptions in many states.
• From the moment you file for bankruptcy, most collection calls, wage garnishments, foreclosures, and repossessions must stop immediately — by federal law — giving instant breathing room.