For Donald Trump, it would not be seven times a charm. His first six bankruptcies all took place before he went into politics. Most of these occurred in two phases: in the early 1990s after he had over-extended on a clutch of Atlantic City casinos, then on various properties before and after the 2008 crash. America’s Chapter 11 bankruptcy protection got him out of trouble.
Since then, Trump has largely made money by licensing his brand name. But there is no easy way out from the $454mn that he owes in damages to the New York legal system. Unlike banks, the law does not take haircuts.
There is nothing to stop Trump from being broke and winning the White House. He already had that history of bankruptcy when he won in 2016. But his financial woes create two novel headaches — one for him, and one for America. For Trump, it undermines his reputation for being rich, which he and his base value highly. Revisions to his net worth cut it from the $10bn he claimed in 2016 to $2.6bn on Forbes’ latest estimate. But these are educated guesses. As a private company, the Trump Organization does not disclose its liabilities.