On March 18, Donald Trump’s lawyers told a New York appellate court that the former president could not pay a bond covering the total amount of a civil fraud judgment of $454 million while appealing the decision.
In February, state appellate court judge Arthur Engoron ruled that Trump and his co-defendants had schemed for years to deceive banks and insurers by inflating their wealth based on manipulated financial statements to secure loans and conduct business.
With interest, Trump owes the state $456.8 million. He must post a bond covering the total judgment amount to halt its enforcement, which is set to begin on March 25. New York Attorney General Letitia James stated that she would seize some of Trump’s assets if he fails to pay the amount by the deadline.
Trump’s lawyers wrote in a court filing that “obtaining a stay of appeal in the full amount of the judgment is not possible under the circumstances presented.”
Trump claimed last year that he has “over $400 million in cash,” but consecutive losses in court, including the defamation case against E. Jean Carroll, have raised his legal debt to over half a billion dollars, according to his lawyers.
Will filing for bankruptcy suspend Trump’s civil fraud fine?
The answer is no.
According to U.S. courts, bankruptcy typically helps individuals who can no longer pay their debts to start over by liquidating assets or creating a payment plan. Bankruptcy laws also protect financially troubled businesses. If bankruptcy is the ultimate goal, a bankruptcy discharge is a legal tool used to achieve it, says Credit Karma.
A “bankruptcy discharge” is a permanent court order that relieves the debtor from personal liability for certain specific types of debts, states the U.S. Court on its website. This means that the debtor is no longer legally obligated to pay any discharged debts.
However, not all debts can be discharged, according to U.S. courts. One of the most common types of debts that cannot be discharged are government debts for fines and penalties.
Trump has until March 25 to pay the $454 million civil fraud fine or purchase a bond covering the total amount. Meanwhile, interest on the judgment continues to accrue, adding about $112,000 per day to the debt.
Source: AP