If you’re considering a bankruptcy filing, you’ve probably heard about Donald Trump filing a bankruptcy case as well. He’s actually filed four cases, in 1991, 1992, 2004 and 2009. But, they’ve all been corporate cases. He’s never filed for personal bankruptcy. His New Jersey casinos and hotels had taken on too much debt, and as a result, his corporation, Trump Entertainment chose to file for Chapter 11 bankruptcy relief.
So, what are the lessons that Donald Trump can teach you about bankruptcy? First, be careful about personal liability. In the early 1990s, he had personally guaranteed a lot of his business loans. If you are a sole proprietor of a business, then you are always going to be on the hook for your personal and business debts. But if you operate a corporation, be careful about those nasty personal guarantees that the banks love to have you sign!
Second, Donald Trump knows that bankruptcy is simply a business decision. And he never apologizes for business decisions or for filing bankruptcy. Have you ever heard Donald Trump apologize? I don’t think so.
If you have to file bankruptcy, then be like Donald and make the necessary corrections to your finances. In other words, you should protect your property and improve your credit rating.