Celebrating Independence, Part II: Thomas Jefferson, from Declaration to Debtor

Thomas Jefferson, Debtor

It is widely known that Thomas Jefferson wrote the Declaration of Independence and became the Third President of the United States. His financial problems are perhaps less well known.

During his presidency, Jefferson went into debt to pay for state dinners at the White House.  Uncle Sam never reimbursed him.*

After Jefferson left the White House, droughts ruined his farming operations. The Depression of 1819 resulted in creditors coming after Monticello to collect on a loan Jefferson co-signed for his son-in-law.*

Being a former president and the Father of the University of Virginia, Jefferson had a pretty good name and he apparently found ways to borrow from new creditors to pay the old ones.

Jefferson died in debt on July 4, 1826, there being nothing like the modern bankruptcy system to help him during his life.

Although the U.S. Constitution gave Congress the power to “establish … uniform Laws on the subject of Bankruptcies” (Art. I, Sec. 8, Cl. 4), Congress did not create a way for an individual to voluntarily file for bankruptcy relief until 1841. This was repealed and replaced with several different Acts, notably with the Bankruptcy Act of 1938, toward the end of the Great Depression.

The closest thing to our current bankruptcy system did not come into being until Congress passed the Bankruptcy Reform Act of 1978, which created what we now call The Bankruptcy Code.  The Code was most recently amended in 2005 with passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).

If you live in the San Francisco Bay Area, call me, James Michel, for a free consultation to see if the Bankruptcy Code can work for you.

After the Fourth of July weekend, of course.

* Source:  Jones, R.G., They Went Broke?!, (2009)

Copyright © 2011  James A. Michel, Attorney at Law

One Response to Celebrating Independence, Part II: Thomas Jefferson, from Declaration to Debtor
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