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Abraham Lincoln, Bankruptcy, 1832

In 1832, at age 23, Lincoln bought a small general store in New Salem, Illinois. He purchased it on credit along with a partner. While the economy was booming in the region, the business struggled and Lincoln eventually sold his share of the business. When his partner later died, Lincoln became liable for a $1,000 debt. Unable to pay he was forced to declare bankruptcy and did not finish repaying his creditors for another 17 years. That same year he began his political career with a campaign for the Illinois General Assembly. He had attained local popularity, and could draw crowds as a natural raconteur (story-teller) in New Salem, though he lacked an education, powerful friends, and money. He advocated navigational improvements on regional waterways. In 1834, he won election to the state legislature after a bipartisan campaign...history carries the rest of his story.

---CBP Commentary: Today, Abraham Lincoln would have gone through a Chapter 13 Bankruptcy. A non-forgiveness of debt, more, a repayment of debt with structured payments.

Additional Note: Abe and his partner, acquired business debt and inventory, in a growing economy, and still failed. $1,000 debt, compounded at 4% interest, for 178 years, that debt would equal $1.07 million in todays dollars...a very significant debt.