Donald Trump Faces Monumental Legal Debts and Potential Bankruptcy
A New York judge has ordered Donald Trump and his companies to pay a total of $355 million in fines, plus interest, after ruling that he manipulated his net worth in financial statements. This comes on the heels of a separate judgment requiring Trump to pay $83.3 million to writer E. Jean Carroll for damaging her reputation after she accused him of sexual assault. In addition, a jury awarded Carroll $5 million for sexual abuse and defamation.
When considering interest payments, Trump’s court-ordered debts could add up to a staggering $542 million, including legal fees owed to The New York Times and a judgment against Trump and his attorney for filing a “frivolous” lawsuit against Hillary Clinton.
But can Trump afford to pay up? Despite his claim of being worth $10 billion, most estimates place his net worth closer to $2 billion. In his 2021 financial statement, Trump reported under $300 million in “cash and cash equivalents.” He has made significant sales, such as his New York golf course and his Washington, D.C., hotel, and may also receive a windfall when his social media company, Truth Social, goes public. However, it remains unclear whether Trump has enough cash on hand to cover his growing debts.
As Trump considers appealing the judgments, questions arise about how he might pay off his debts. Could he tap into campaign contributions or political action committees (PACs) for the funds? Federal election law prohibits the use of campaign funds for personal use, but the rules are less clear when it comes to PACs. Trump’s Save America PAC and other fundraising organizations have already devoted millions to legal fees, suggesting that he may explore this option.
Amid these mounting financial challenges, Trump could potentially declare bankruptcy, as several of his previous companies have done. However, under the judge’s ruling, Trump would still be liable to pay even if the Trump Organization declares bankruptcy.
If Trump refuses to pay the money, the consequences could include having his assets seized and his wages garnished. The courts have the power to appoint monitors to oversee the Trump Organization’s finances and to freeze bank accounts or seize physical assets if necessary.
Despite his personal wealth, Trump now faces an uncertain financial future as he grapples with a web of legal challenges and billions of dollars in court-ordered debts. As the former president navigates this precarious financial landscape, the implications could be far-reaching for both his personal fortune and his political career.