Notice of closure attached to the door of a computer store the day after its parent company declared "bankruptcy" (strictly, put into administration—see text) in the United Kingdom.

Bankruptcy is a legal status of an insolvent person or an organisation, that is, one who cannot repay the debts they owe to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor.

Bankruptcy is not the only legal status that an insolvent person or organisation may have, and the term bankruptcy is therefore not the same as insolvency. In some countries, including the United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings, for example liquidation and administration, are applied to companies. In the United States the term bankruptcy is applied more broadly to formal insolvency proceedings.

Etymology[link]

The word bankruptcy is formed from the ancient Latin bancus (a bench or table), and ruptus (broken). A "bank" originally referred to a bench, which the first bankers had in the public places, in markets, fairs, etc. on which they tolled their money,^{[clarification needed]} wrote their bills of exchange, etc. Hence, when a banker failed, he broke his bank, to advertise to the public that the person to whom the bank belonged was no longer in a condition to continue his business. As this practice was very frequent in Italy, it is said the term bankrupt is derived from the Italian banca rotta, broken bank (see e.g. Ponte Vecchio).^[1]

History[link]

In Ancient Greece, bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants were forced into "debt slavery", until the creditor recouped losses via their physical labour. Many city-states in ancient Greece limited debt slavery to a period of five years and debt slaves had protection of life and limb, which regular slaves did not enjoy. However, servants of the debtor could be retained beyond that deadline by the creditor and were often forced to serve their new lord for a lifetime, usually under significantly harsher conditions.

In the Torah, or Old Testament, every seventh year is decreed by Mosaic Law as a Sabbatical year wherein the release of all debts that are owed by members of the community is mandated, but not of "foreigners".^[2] The seventh Sabbatical year, or forty-ninth year, is then followed by another Sabbatical year known as the Year of Jubilee wherein the release of all debts is mandated, for fellow community members and foreigners alike, and the release of all debt-slaves is also mandated.^[3] The Year of Jubilee is announced in advance on the Day of Atonement, or the tenth day of the seventh Biblical month, in the forty-ninth year by the blowing of trumpets throughout the land of Israel.

In Islamic teaching, according to the Qur'an, an insolvent person was deemed to be allowed time to be able to pay out his debt. This is recorded in the Qur'an's second chapter (Sura Al-Baqara), Verse 280, which notes: "And if someone is in hardship, then let there be postponement until a time of ease. But if you give from your right as charity, then it is better for you, if you only knew."

The Statute of Bankrupts of 1542 was the first statute under English law dealing with bankruptcy or insolvency.^[4] Bankruptcy is also documented in East Asia. According to al-Maqrizi, the Yassa of Genghis Khan contained a provision that mandated the death penalty for anyone who became bankrupt three times.

A failure of a nation to meet bond repayments has been seen on many occasions. Philip II of Spain had to declare four state bankruptcies in 1557, 1560, 1575 and 1596. According to Kenneth S. Rogoff, "Although the development of international capital markets was quite limited prior to 1800, we nevertheless catalog the numerous defaults of France, Portugal, Prussia, Spain, and the early Italian city-states. At the edge of Europe, Egypt, Russia, and Turkey have histories of chronic default as well."^[5]

Modern law and debt restructuring[link]

The principal focus of modern insolvency legislation and business debt restructuring practices no longer rests on the elimination of insolvent entities but on the remodeling of the financial and organisational structure of debtors experiencing financial distress so as to permit the rehabilitation and continuation of their business.

For private households, it is argued to be insufficient to merely dismiss debts after a certain period. It is important to assess the underlying problems and to minimise the risk of financial distress to re-occur. It has been stressed that debt advice, a supervised rehabilitation period, financial education and social help to find sources of income and to manage household expenditures better need to be equally provided during this period of rehabilitation (Reifner et al., 2003; Gerhardt, 2009; Frade, 2010). In most EU Member States, debt discharge is conditioned by a partial payment obligation and by a number of requirements concerning the debtor’s behavior. In the United States (US), discharge is conditioned to a lesser extent. Nevertheless, it should be noted that the spectrum is broad in the EU, with the UK coming closest to the US system (Reifner et al., 2003; Gerhardt, 2009; Frade, 2010). Other Member States do not provide the option of a debt discharge. Spain, for example, passed a bankruptcy law (ley concursal) in 2003 which provides for debt settlement plans that can result in a reduction of the debt (maximally half of the amount) or an extension of the payment period of maximally five years (Gerhardt, 2009); nevertheless, it does not foresee debt discharge.^[6]

Fraud[link]

Bankruptcy fraud is a white-collar crime. While difficult to generalise across jurisdictions, common criminal acts under bankruptcy statutes typically involve concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing or redistribution arrangements. Falsifications on bankruptcy forms often constitute perjury. Multiple filings are not in and of themselves criminal, but they may violate provisions of bankruptcy law. In the U.S., bankruptcy fraud statutes are particularly focused on the mental state of particular actions.^[7][8] Bankruptcy fraud is a federal crime in the United States.

Bankruptcy fraud should be distinguished from strategic bankruptcy, which is not a criminal act, but may work against the filer.

All assets must be disclosed in bankruptcy schedules whether or not the debtor believes the asset has a net value. This is because once a bankruptcy petition is filed, it is for the creditors, not the debtor to decide whether a particular asset has value. The future ramifications of omitting assets from schedules can be quite serious for the offending debtor. A closed bankruptcy may be reopened by motion of a creditor or the U.S. trustee if a debtor attempts to later assert ownership of such an "unscheduled asset" after being discharged of all debt in the bankruptcy. The trustee may then seize the asset and liquidate it for the benefit of the (formerly discharged) creditors. Whether or not a concealment of such an asset should also be considered for prosecution as fraud and/or perjury would then be at the discretion of the judge and/or U.S. Trustee.

In individual countries[link]

Australia[link]

The Bankruptcy Act 1966 (Commonwealth) is the legislation that governs bankruptcy in Australia. Only individuals can become bankrupt; insolvent companies go into liquidation or administration (see administration (insolvency)). There are three "parts" of the act under which the vast majority of "acts of bankruptcy" fall. Part IV (Full Bankruptcy), Part IX Debt Agreements and Part X Personal Insolvency Agreements. Agreements refer specifically to arrangements between creditors and debtors, whereas Part IV relates to full bankruptcy and is generally synonymous with "bankruptcy".

A person or debtor can declare himself or herself bankrupt by lodging a debtor's petition with the Official Receiver, which is the Insolvency and Trustee Service Australia (ITSA). A person can also be made bankrupt after a creditor's petition results in the making of a sequestration order in the Federal Magistrates Court. To declare bankruptcy or for a creditors petition to be lodged, a minimum debt of $5,000 is required.

All bankrupts are required to lodge a Statement of Affairs document with ITSA, which includes important information about their assets and liabilities. A bankruptcy cannot be annulled until this document has been lodged.

Ordinarily, a Part IV bankruptcy lasts three years from the filing of the Statement of Affairs with ITSA. In the case of a debtor's petition, the Statement of Affairs is filed with the petition and the three year period commences immediately. However, in the case of a creditor's petition, the Statement of Affairs will rarely be filed on the same day the court order is made. If the bankrupt fails to lodge the document within a certain period of time, he or she can be prosecuted and fined.

A Bankruptcy Trustee (in most cases this is the Official Receiver) is appointed to deal with all matters regarding the administration of the bankrupt estate. The Trustee's job includes notifying creditors of the estate and dealing with creditor inquiries; ensuring that the bankrupt complies with his or her obligations under the Bankruptcy Act; investigating the bankrupt's financial affairs; realising funds to which the estate is entitled under the Bankruptcy Act and distributing dividends to creditors if sufficient funds become available.

For the duration of their bankruptcy, all bankrupts have certain restrictions placed upon them under the Act. For example, a bankrupt must obtain the permission of his or her trustee to travel overseas. Failure to do so may result in the bankrupt being stopped at the airport by the Australian Federal Police. Additionally, a bankrupt is required to provide his or her Trustee with details of income and assets. If the bankrupt does not comply with the Trustee's request to provide details of income, the Trustee may have grounds to lodge an Objection to Discharge, which has the effect of extending the bankruptcy for a further five years.

The realisation of funds usually comes from two main sources: the bankrupt's assets and the bankrupt's wages. There are certain assets that are protected, referred to as "protected assets". These include household furniture and appliances, tools of the trade and vehicles up to a certain value. All other assets of value will be sold. If a house or car is above a certain value, the bankrupt can buy the interest back from the estate in order to keep the asset. If the bankrupt does not do this, the interest vests in the estate and the trustee is able to take possession of the asset and sell it.

The bankrupt will have to pay income contributions if his or her income is above a certain threshold. The threshold is indexed biannually in March and September, and varies according to the number of dependents the bankrupt has. The income contributions liability is calculated by halving the amount of income that exceeds the threshold. If the bankrupt fails to pay the contributions due, the Trustee can issue a notice to garnishee the bankrupt's wages. If that is not possible, the Trustee may lodge an Objection to Discharge, effectively extending the bankruptcy for a further five years.

Bankruptcies can be annulled prior to the expiration of the normal three year period if all debts are paid out in full. Sometimes a bankrupt may be able to raise enough funds to make an Offer of Composition to creditors, which would have the effect of paying the creditors some of the money they are owed. If the creditors accept the offer, the bankruptcy can be annulled after the funds are received.

After the bankruptcy is annulled or the bankrupt has been automatically discharged, the bankrupt's credit report status will be shown as "discharged bankrupt" for some years. The number of years varies depending on the company issuing the report, but the report will eventually cease to record that information.

Certain limited information on Bankruptcy Law in Australia can be found at the ITSA web site.^[9]

Brazil[link]

In Brazil, the Bankruptcy Law (11.101/05) disciplines judicial or extrajudicial recuperation & Bankruptcy and is only applicable to private companies, except for financial institutions, credit cooperatives, consortia, entity of supplementary schemes, societies operating health care plan, society of capitalisation and other entities legally treated as issues. This is not applicable to public companies.

Current law covers three legal proceedings. The first one is bankruptcy itself ("Falência"). Bankruptcy is the judicial liquidation procedure for an insolvent merchant that promotes the removal of the debtor from its activities, aiming to preserve and optimise productive use of assets, assets and productive resources, including intangible assets, of the company. The final goal of bankruptcy is to liquidate company assets and debtors payment.

The second one concerns Judicial Recuperation ("Recuperação Judicial"). Its goal is to allow the overcoming of the economic-financial crisis situation of the debtor, in order to allow the continuation of the source producer, the employment of workers and the interests of creditors, promoting, thus, the preservation of the company, its social function and stimulate the economic activity. It's a judiciary procedure required by the debtor who exercice its activities more than 2 years and have to be approval by the judge.

The Extrajudicial Recuperation ("Recuperação Extrajudicial") is a private negotiation that involves creditors and debtors and, as the judicial recuperation, also have to be approved by Judiciary power.^[10]

Canada[link]

Bankruptcy in Canada is governed by the Bankruptcy and Insolvency Act and is applicable to businesses and individuals. The office of the Superintendent of Bankruptcy, a federal agency, is responsible for overseeing that bankruptcies are administered in a fair and orderly manner by all licensed Trustees in Canada. Trustees in bankruptcy actually administer the bankruptcy estates and are governed by the Bankruptcy and Insolvency Act of Canada.

Bankruptcy is filed when a person or a company becomes insolvent and cannot pay their debts as they become due and if they have at least $1,000 in debt.

Duties of trustees[link]

Some of the duties of the trustee in bankruptcy are to:

• Review the file for any fraudulent preferences or reviewable transactions
• Chair meetings of creditors
• Sell any non-exempt assets
• Object to the bankrupt's discharge
• Distribute funds to creditors

Creditors' meetings[link]

Creditors become involved by attending creditors' meetings. The trustee calls the first meeting of creditors for the following purposes:

• To consider the affairs of the bankrupt
• To affirm the appointment of the trustee or substitute another in place thereof
• To appoint inspectors
• To give such directions to the trustee as the creditors may see fit with reference to the administration of the estate.

Consumer proposals in Canada[link]

In Canada, a person can file a consumer proposal as an alternative to bankruptcy. A consumer proposal is a negotiated settlement between a debtor and their creditors.

A typical proposal would involve a debtor making monthly payments for a maximum of five years, with the funds distributed to their creditors. Even though most proposals call for payments of less than the full amount of the debt owing, in most cases, the creditors will accept the deal, because if they do not, the next alternative may be personal bankruptcy, where the creditors will get even less money. The creditors have 45 days to accept or reject the consumer proposal. Once the proposal is accepted by both the creditors and the Court, the debtor makes the payments to the Proposal Administrator each month (or as otherwise stipulated in their proposal), and the general creditors are prevented from taking any further legal or collection action. If the proposal is rejected, the debtor is returned to his prior insolvent state and may have no alternative but to declare personal bankruptcy.

A consumer proposal can only be made by a debtor with debts to a maximum of $250,000 (not including the mortgage on their principal residence). If debts are greater than $250,000, the proposal must be filed under Division 1 of Part III of the Bankruptcy and Insolvency Act. An Administrator is required in the Consumer Proposal, and a Trustee in the Division I Proposal (these are vertually the same although the terms are not interchangeable). A Proposal Administrator is almost always a licensed trustee in bankruptcy, although the Superintendent of Bankruptcy may appoint other people to serve as administrators.

In 2006, there were 98,450 personal insolvency filings in Canada: 79,218 bankruptcies and 19,232 consumer proposals.^[11]

China[link]

This section requires expansion.

Ireland[link]

Bankruptcy in Ireland applies only to natural persons.^[12] Other insolvency processes including liquidation and examinership are used to deal with corporate insolvency.

Irish bankruptcy law has been the subject of significant recent comment, from both government sources and the media, as being in need of reform. Part 7 of the Civil Law (Miscellaneous Provisions) Act 2011^[13] has started this process and the government has committed to further reform.

India[link]

India does not have a clear law on corporate bankruptcy even though individual bankruptcy laws have been in existence since 1874. The current law in force was enacted in 1920 called Provincial Insolvency Act.

Legal meaning of the terms bankruptcy, insolvency, liquidation and dissolution are contested in the Indian legal system. There is no regulation or statute legislated upon bankruptcy which denotes a condition of inability to meet a demand of a creditor as is common in many other jurisdictions.

Winding up of companies is in the jurisdiction of the Courts which can take a decade even after the Company has actually been declared insolvent. On the other hand, supervisory restructuring at the behest of the Board of Industrial and Financial Reconstruction is generally undertaken using receivership by a Public Finance Institution.

Japan[link]

See Dirty thirty (Japan)

The Netherlands[link]

The Dutch bankruptcy law is governed by the Dutch Bankruptcy Code ("Faillissementswet"). The code covers three separate legal proceedings. The first is the bankruptcy ("Faillissement"). The goal of the bankruptcy is the liquidation of the assets of the company. The bankruptcy applies to individuals and companies. The second legal proceeding in the Faillissementswet is the "Surseance". The Surseance only applies to companies. Its goal is to reach an agreement with the creditors of the company. The third proceeding is the "Schuldsanering". This proceeding is designed for individuals only.

Switzerland[link]

Bankruptcy according to Salvation Army, Switzerland.

Under Swiss law, bankruptcy can be a consequence of insolvency. It is a court-ordered form of debt enforcement proceedings that applies, in general, to registered commercial entities only. In a bankruptcy, all assets of the debtor are liquidated under the administration of the creditors, although the law provides for debt restructuring options similar to those under Chapter 11 of the U.S. Bankruptcy code.

Sweden[link]

In Sweden, bankruptcy (Swedish: konkurs) is a process that may involve a company or individual. A creditor or the company itself can apply for bankruptcy. An external bankruptcy manager will take over the company or the assets of the person, trying to sell as much as possible. A person or a company in bankruptcy can not access its assets (with some exceptions).

The formal bankruptcy process is rarely carried out for individuals.^[14] Creditors can claim money through the Enforcement Administration anyway, and creditors do not usually benefit from the bankruptcy of individuals because there are costs of a bankruptcy manager which has priority. Unpaid debts remain after bankruptcy for individuals. People who are deeply in debt can obtain a debt arrangement procedure (Swedish:skuldsanering). On application, they obtain a payment plan under which they pay as much as they can for five years, and then all remaining debts are cancelled. Debts that are derived from being subjected to a ban on business operations (issued by court, commonly for tax fraud and/or fraudulent business practices) or owed to a crime victim as compensation for damages are exempted from this and like before this process was introduced in 2006 will remain life-long.^[15] The most common reasons for personal insolvency in Sweden are illness, unemployment, divorce or company bankruptcy, not the reckless spending claimed by politicians and debt collection agencies when they describe the problem with deep personal debts.^[16]

United Kingdom[link]

In the United Kingdom, bankruptcy (in a strict legal sense) relates only to individuals (including sole proprietors) and partnerships. Companies and other corporations enter into differently-named legal insolvency procedures: liquidation and administration (administration order and administrative receivership). However, the term 'bankruptcy' is often used when referring to companies in the media and in general conversation. Bankruptcy in Scotland is referred to as sequestration. To apply for your own bankruptcy in Scotland you must have more than £1500 of debt.

A trustee in bankruptcy must be either an Official Receiver (a civil servant) or a licensed insolvency practitioner. Current law in England and Wales derives in large part from the Insolvency Act 1986. Following the introduction of the Enterprise Act 2002, a UK bankruptcy will now normally last no longer than 12 months and may be less, if the Official Receiver files in court a certificate that his investigations are complete. It was expected that the UK Government's liberalisation of the UK bankruptcy regime would increase the number of bankruptcy cases; the Insolvency Service statistics appear to bear this out:

After the increase in 2005 and 2006 the figures have remained stable.

Bankruptcy and pensions in the UK[link]

The UK bankruptcy law was changed in May 2000, effective May 29, 2000.^{[citation needed]} Debtors may now retain occupational pensions while in bankruptcy, except in rare cases.^{[citation needed]}

Proposed bankruptcy reform in the UK[link]

The Government are currently considering legislation to 'streamline' the bankruptcy process in the UK. Under the new proposals, struggling borrowers may be able to apply for bankruptcy without necessarily having to go to court, except where a disagreement exists between the debtor and their creditors.^[17]

United States[link]

Bankruptcy in the United States is a matter placed under Federal jurisdiction by the United States Constitution (in Article 1, Section 8, Clause 4), which allows Congress to enact "uniform laws on the subject of bankruptcies throughout the United States." The Congress has enacted statutes governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code. Federal law is amplified by state law in some places where Federal law fails to speak or expressly defers to state law.

While bankruptcy cases are always filed in United States Bankruptcy Court (an adjunct to the U.S. District Courts), bankruptcy cases, particularly with respect to the validity of claims and exemptions, are often dependent upon State law. State law therefore plays a major role in many bankruptcy cases, and it is often not possible to generalise bankruptcy law across state lines.

Generally, a debtor declares bankruptcy to obtain relief from debt, and this is accomplished either through a discharge of the debt or through a restructuring of the debt. Generally, when a debtor files a voluntary petition, his or her bankruptcy case commences.

Chapters[link]

There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:

• Chapter 7: basic liquidation for individuals and businesses; also known as straight bankruptcy; it is the simplest and quickest form of bankruptcy available
• Chapter 9: municipal bankruptcy; a federal mechanism for the resolution of municipal debts
• Chapter 11: rehabilitation or reorganisation, used primarily by business debtors, but sometimes by individuals with substantial debts and assets; known as corporate bankruptcy, it is a form of corporate financial reorganisation which typically allows companies to continue to function while they follow debt repayment plans
• Chapter 12: rehabilitation for family farmers and fishermen;
• Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income; enables individuals with regular income to develop a plan to repay all or part of their debts; also known as Wage Earner Bankruptcy
• Chapter 15: ancillary and other international cases; provides a mechanism for dealing with bankruptcy debtors and helps foreign debtors to clear debts.

The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13. As much as 65% of all U.S. consumer bankruptcy filings are Chapter 7 cases. Corporations and other business forms file under Chapters 7 or 11.

In Chapter 7, a debtor surrenders his or her non-exempt property to a bankruptcy trustee who then liquidates the property and distributes the proceeds to the debtor's unsecured creditors. In exchange, the debtor is entitled to a discharge of some debt; however, the debtor will not be granted a discharge if he or she is guilty of certain types of inappropriate behavior (e.g. concealing records relating to financial condition) and certain debts (e.g. spousal and child support, student loans, some taxes) will not be discharged even though the debtor is generally discharged from his or her debt. Many individuals in financial distress own only exempt property (e.g. clothes, household goods, an older car) and will not have to surrender any property to the trustee. The amount of property that a debtor may exempt varies from state to state. Chapter 7 relief is available only once in any eight year period. Generally, the rights of secured creditors to their collateral continues even though their debt is discharged. For example, absent some arrangement by a debtor to surrender a car or "reaffirm" a debt, the creditor with a security interest in the debtor's car may repossess the car even if the debt to the creditor is discharged.

The 2005 amendments to the Bankruptcy Code introduced the "means test" for eligibility for chapter 7. An individual who fails the means test will have his or her chapter 7 case dismissed or may have to convert his or her case to a case under chapter 13.

Generally, a trustee will sell most of the debtor's assets to pay off creditors. However, certain assets of the debtor are protected to some extent. For example, Social Security payments, unemployment compensation, and limited values of equity in a home, car, or truck, household goods and appliances, trade tools, and books are protected. However, these exemptions vary from state to state.

In Chapter 13, the debtor retains ownership and possession of all of his or her assets, but must devote some portion of his or her future income to repaying creditors, generally over a period of three to five years. The amount of payment and the period of the repayment plan depend upon a variety of factors, including the value of the debtor's property and the amount of a debtor's income and expenses. Secured creditors may be entitled to greater payment than unsecured creditors.

Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits. If you are an individual or a sole proprietor, you are allowed to file for a Chapter 13 bankruptcy to repay all or part of your debts. Under this chapter, you can propose a repayment plan in which to pay your creditors over three to five years. If your monthly income is less than the state's median income, your plan will be for three years unless the court finds "just cause" to extend the plan for a longer period. If your monthly income is greater than your state's median income, the plan must generally be for five years. A plan cannot exceed the five-year limitation.

In contrast to Chapter 7, the debtor in Chapter 13 may keep all of his or her property, whether or not exempt. If the plan appears feasible and if the debtor complies with all the other requirements, the bankruptcy court will typically confirm the plan and the debtor and creditors will be bound by its terms. Creditors have no say in the formulation of the plan other than to object to the plan, if appropriate, on the grounds that it does not comply with one of the Code's statutory requirements. Generally, the payments are made to a trustee who in turn disburses the funds in accordance with the terms of the confirmed plan.

When the debtor completes payments pursuant to the terms of the plan, the court will formally grant the debtor a discharge of the debts provided for in the plan. However, if the debtor fails to make the agreed upon payments or fails to seek or gain court approval of a modified plan, a bankruptcy court will often dismiss the case on the motion of the trustee. Pursuant to the dismissal, creditors will typically resume pursuit of state law remedies to the extent a debt remains unpaid.

In Chapter 11, the debtor retains ownership and control of assets and is re-termed a debtor in possession ("DIP"). The debtor in possession runs the day to day operations of the business while creditors and the debtor work with the Bankruptcy Court in order to negotiate and complete a plan. Upon meeting certain requirements (e.g. fairness among creditors, priority of certain creditors) creditors are permitted to vote on the proposed plan. If a plan is confirmed the debtor will continue to operate and pay its debts under the terms of the confirmed plan. If a specified majority of creditors do not vote to confirm a plan, additional requirements may be imposed by the court in order to confirm the plan. Debtors filing for Chapter 11 protection a second time are known informally as "Chapter 22" filers.^[18]

Chapter 7 and Chapter 13 are the efficient bankruptcy chapters often used by most individuals. The chapters which almost always apply to consumer debtors are chapter 7, known as a "straight bankruptcy", and chapter 13, which involves an affordable plan of repayment. An important feature applicable to all types of bankruptcy filings is the automatic stay. The automatic stay means that the mere request for bankruptcy protection automatically stops and brings to a grinding halt most lawsuits, repossessions, foreclosures, evictions, garnishments, attachments, utility shut-offs, and debt collection activity.

Bankruptcy Exemptions[link]

A Bankruptcy Exemption defines the property a debtor may retain and preserve through bankruptcy. Certain real and personal property can be exempted on "Schedule C"^[19] of a debtors bankruptcy forms, and effectively be taken outside the debtor's bankruptcy estate. Bankruptcy Exemptions are available only to individuals filing bankruptcy.^[20] There are two alternative systems that can be used to "exempt" property from a bankruptcy estate, Federal Exemptions^[21] (available in some states but not all), and State Exemptions (which vary widely between states).

Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)[link]

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (April 20, 2005) ("BAPCPA"), substantially amended the Bankruptcy Code. Many provisions of BAPCPA were forcefully advocated by consumer lenders and were just as forcefully opposed by many consumer advocates, bankruptcy academics, bankruptcy judges, and bankruptcy lawyers.^[22] The enactment of BAPCPA followed nearly eight years of debate in Congress. Most of the law's provisions became effective on October 17, 2005. Upon signing the bill, then President Bush stated:

Under the new law, Americans who have the ability to pay will be required to pay back at least a portion of their debts. Those who fall behind their state's median income will not be required to pay back their debts. The new law will also make it more difficult for serial filers to abuse the most generous bankruptcy protections. Debtors seeking to erase all debts will now have to wait eight years from their last bankruptcy before they can file again. The law will also allow us to clamp down on bankruptcy mills that make their money by advising abusers on how to game the system.^[23]

It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared.^[24]

Among its many changes to consumer bankruptcy law, BAPCPA enacted a "means test", which was intended to make it more difficult for a significant number of financially distressed individual debtors whose debts are primarily consumer debts to qualify for relief under Chapter 7 of the Bankruptcy Code. The "means test" is employed in cases where an individual with primarily consumer debts has more than the average annual income for a household of equivalent size, computed over a 180 day period prior to filing. If the individual must "take" the "means test", their average monthly income over this 180 day period is reduced by a series of allowances for living expenses and secured debt payments in a very complex calculation that may or may not accurately reflect that individual's actual monthly budget. If the results of the means test show no disposable income(or in some cases a very small amount) then the individual qualifies for Chapter 7 relief. If a debtor does not qualify for relief under Chapter 7 of the Bankruptcy Code, either because of the Means Test or because Chapter 7 does not provide a permanent solution to delinquent payments for secured debts, such as mortgages or vehicle loans, the debtor may still seek relief under Chapter 13 of the Code. A Chapter 13 plan often does not require repayment to general unsecured debts, such as credit cards or medical bills.

BAPCPA also requires individuals seeking bankruptcy relief to undertake credit counseling with approved counseling agencies prior to filing a bankruptcy petition and to undertake education in personal financial management from approved agencies prior to being granted a discharge of debts under either Chapter 7 or Chapter 13. Some studies of the operation of the credit counseling requirement suggest that it provides little benefit to debtors who receive the counseling because the only realistic option for many is to seek relief under the Bankruptcy Code.^{[citation needed]}

Europe in general[link]

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (May 2007)

During 2004, the number of insolvencies reached all time highs in many European countries. In France, company insolvencies rose by more than 4%, in Austria by more than 10%, and in Greece by more than 20%. The increase in the number of insolvencies, however, does not indicate the total financial impact of insolvencies in each country because there is no indication of the size of each case. An increase in the number of bankruptcy cases does not necessarily entail an increase in bad debt write-off rates for the economy as a whole.

Bankruptcy statistics are also a trailing indicator. There is a time delay between financial difficulties and bankruptcy. In most cases, several months or even years pass between the financial problems and the start of bankruptcy proceedings. Legal, tax, and cultural issues may further distort bankruptcy figures, especially when comparing on an international basis. Two examples:

• In Austria, more than half of all potential bankruptcy proceedings in 2004 were not opened, due to insufficient funding.
• In Spain, it is not economically profitable to open insolvency/bankruptcy proceedings against certain types of businesses, and therefore the number of insolvencies is quite low. For comparison: In France, more than 40,000 insolvency proceedings were opened in 2004, but under 600 were opened in Spain. At the same time the average bad debt write-off rate in France was 1.3% compared to Spain with 2.6%.

The insolvency numbers for private individuals also do not show the whole picture. Only a fraction of heavily indebted households will decide to file for insolvency. Two of the main reasons for this are the stigma of declaring themselves insolvent and the potential business disadvantage.

See also[link]

• Bankruptcy alternatives
• Creditor's rights
• Debt consolidation
• Debt relief
• Debt restructuring
• Debtor in possession
• Default
• DIP Financing
• Distressed securities
• Financial distress
• Insolvency
• Judicial estoppel
• Liquidation
• List of business failures
• Sole Trader Insolvency (UK)
• Stalking Horse Agreement
• Tools of trade
• Turnaround ADR

References[link]

Further reading[link]

• Balleisen, Edward (2001). Navigating Failure: Bankruptcy and Commercial Society in Antebellum America. Chapel Hill: University of North Carolina Press. p. 322. ISBN 0-8078-2600-6. 
• DePamphilis, Donald M. (2009). Mergers, Acquisitions, and Other Restructurings, 5th Edition. Elsevier, Academic Press. ISBN 978-0-12-374878-2. 
• Sandage, Scott A. (2006). Born Losers: A History of Failure in America. Cambridge, Mass.: Harvard University Press. ISBN 0-674-02107-X. 

External links[link]

Wikiquote has a collection of quotations related to: Bankruptcy

Wikisource has the text of the 1911 Encyclopædia Britannica article Bankruptcy.

• U.S. Federal Bankruptcy Courts
• Official U.S. Bankruptcy Statistics
• US Courts Bankruptcy Law
• Executive Office for United States Bankruptcy Trustees
• Cornell Bankruptcy Laws
• National Association of Consumer Bankruptcy Attorneys
• Bankruptcy Research Database (WebBRD)
• Website of the Insolvency Service in the UK
• Bankruptcy Statistics in Hong Kong

Barack Obama
44th President of the United States
Incumbent
Assumed office January 20, 2009
Vice President	Joe Biden
Preceded by	George W. Bush
United States Senator from Illinois
In office January 3, 2005 – November 16, 2008
Preceded by	Peter Fitzgerald
Succeeded by	Roland Burris
Member of the Illinois Senate from the 13th District
In office January 8, 1997 – November 4, 2004
Preceded by	Alice Palmer
Succeeded by	Kwame Raoul
Personal details
Born	Barack Hussein Obama II (1961-08-04) August 4, 1961 (age 50)[1] Honolulu, Hawaii, U.S.[2]
Political party	Democratic
Spouse(s)	Michelle Robinson (1992–present)
Children	Malia (born 1998) Sasha (born 2001)
Residence	White House (Official) Chicago, Illinois (Private)
Alma mater	Occidental College Columbia University (B.A.) Harvard Law School (J.D.)
Profession	Community organizer Lawyer Constitutional law professor Author
Religion	Christianity[3]
Awards	Nobel Peace Prize
Signature
Website	barackobama.com

	This article is part of a series on Barack Obama
Background Illinois Senate US Senate Political positions Public image Family 2008 primaries Obama–Biden campaign Transition Inauguration Electoral history Presidency Timeline '09 '10 '11 '12 First 100 days Nobel Peace Prize Re-election campaign

Barack Hussein Obama II (ⁱ/bəˈrɑːk huːˈseɪn oʊˈbɑːmə/; born August 4, 1961) is the 44th and current President of the United States. He is the first African American to hold the office. In January 2005, Obama was sworn in as a U.S. Senator in the state of Illinois. He would hold this office until November 2008, when he resigned following his victory in the 2008 presidential election.

Born in Honolulu, Hawaii, Obama is a graduate of Columbia University and Harvard Law School, where he was the president of the Harvard Law Review. He was a community organizer in Chicago before earning his law degree. He worked as a civil rights attorney in Chicago and taught constitutional law at the University of Chicago Law School from 1992 to 2004. He served three terms representing the 13th District in the Illinois Senate from 1997 to 2004.

Following an unsuccessful bid against the Democratic incumbent for a seat in the United States House of Representatives in 2000, Obama ran for the United States Senate in 2004. Several events brought him to national attention during the campaign, including his victory in the March 2004 Illinois Democratic primary for the Senate election and his keynote address at the Democratic National Convention in July 2004. He won election to the U.S. Senate in Illinois in November 2004. His presidential campaign began in February 2007, and after a close campaign in the 2008 Democratic Party presidential primaries against Hillary Rodham Clinton, he won his party's nomination. In the 2008 presidential election, he defeated Republican nominee John McCain, and was inaugurated as president on January 20, 2009. Nine months later, Obama was named the 2009 Nobel Peace Prize laureate. In April 2011, he announced that he would be running for re-election in 2012.

As president, Obama signed economic stimulus legislation in the form of the American Recovery and Reinvestment Act of 2009 and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Other domestic policy initiatives include the Patient Protection and Affordable Care Act, the Dodd–Frank Wall Street Reform and Consumer Protection Act, the Don't Ask, Don't Tell Repeal Act of 2010, and the Budget Control Act of 2011. In May 2012, he became the first sitting U.S. president to openly support legalizing same-sex marriage. In foreign policy, he ended the war in Iraq, increased troop levels in Afghanistan, signed the New START arms control treaty with Russia, ordered U.S. involvement in the 2011 Libya military intervention, and ordered the military operation that resulted in the death of Osama bin Laden.

Early life and career[link]

Obama was born on August 4, 1961, at Kapiʻolani Maternity & Gynecological Hospital (now Kapiʻolani Medical Center for Women and Children) in Honolulu, Hawaii,^[2][4][5] and is the first President to have been born in Hawaii.^[6] His mother, Stanley Ann Dunham, was born in Wichita, Kansas, and was of mostly English ancestry,^[7] along with Scottish, Irish, German, and Swiss.^{[8][9][10][11][12]} His father, Barack Obama, Sr., was a Luo from Nyang’oma Kogelo, Nyanza Province, Kenya. Obama's parents met in 1960 in a Russian class at the University of Hawaiʻi at Mānoa, where his father was a foreign student on scholarship.^[13][14] The couple married on February 2, 1961,^[15] separated when Obama Sr. went to Harvard University on scholarship, and divorced in 1964.^[13] Obama Sr. remarried and returned to Kenya, visiting Barack in Hawaii only once, in 1971. He died in an automobile accident in 1982.^[16]

After her divorce, Dunham married Indonesian Lolo Soetoro, who was attending college in Hawaii. When Suharto, a military leader in Soetoro's home country, came to power in 1967, all Indonesian students studying abroad were recalled, and the family moved to the Menteng neighborhood of Jakarta.^[4][17] From ages six to ten, Obama attended local schools in Jakarta, including Besuki Public School and St. Francis of Assisi School.^[18]

In 1971, Obama returned to Honolulu to live with his maternal grandparents, Madelyn and Stanley Armour Dunham, and with the aid of a scholarship attended Punahou School, a private college preparatory school, from fifth grade until his graduation from high school in 1979.^[19] Obama's mother returned to Hawaii in 1972, remaining there until 1977 when she went back to Indonesia to work as an anthropological field worker. She finally returned to Hawaii in 1994 and lived there for one year before dying of ovarian cancer.^[15][20]

Of his early childhood, Obama recalled, "That my father looked nothing like the people around me—that he was black as pitch, my mother white as milk—barely registered in my mind."^[14] He described his struggles as a young adult to reconcile social perceptions of his multiracial heritage.^[21] Reflecting later on his years in Honolulu, Obama wrote: "The opportunity that Hawaii offered—to experience a variety of cultures in a climate of mutual respect—became an integral part of my world view, and a basis for the values that I hold most dear."^[22] Obama has also written and talked about using alcohol, marijuana, and cocaine during his teenage years to "push questions of who I was out of my mind."^[23] At the 2008 Civil Forum on the Presidency, Obama described his high-school drug use as a great moral failure.^[24]

Following high school, Obama moved to Los Angeles in 1979 to attend Occidental College. In February 1981, he made his first public speech, calling for Occidental to divest from South Africa in response to its policy of apartheid.^[25] In mid-1981, Obama traveled to Indonesia to visit his mother and sister Maya, and visited the families of college friends in Pakistan and India for three weeks.^[25] Later in 1981, he transferred to Columbia University in New York City, where he majored in political science with a specialty in international relations^[26] and graduated with a Bachelor of Arts in 1983. He worked for a year at the Business International Corporation,^[27] then at the New York Public Interest Research Group.^[28][29]

Chicago community organizer and Harvard Law School[link]

Two years after graduating, Obama was hired in Chicago as director of the Developing Communities Project (DCP), a church-based community organization originally comprising eight Catholic parishes in Roseland, West Pullman, and Riverdale on Chicago's South Side. He worked there as a community organizer from June 1985 to May 1988.^[29][30] He helped set up a job training program, a college preparatory tutoring program, and a tenants' rights organization in Altgeld Gardens.^[31] Obama also worked as a consultant and instructor for the Gamaliel Foundation, a community organizing institute.^[32] In mid-1988, he traveled for the first time in Europe for three weeks and then for five weeks in Kenya, where he met many of his paternal relatives for the first time.^[33] He returned to Kenya in August 2006 for a visit to his father's birthplace, a village near Kisumu in rural western Kenya.^[34]

In late 1988, Obama entered Harvard Law School. He was selected as an editor of the Harvard Law Review at the end of his first year,^[35] and president of the journal in his second year.^[31][36] During his summers, he returned to Chicago, where he worked as an associate at the law firms of Sidley Austin in 1989 and Hopkins & Sutter in 1990.^[37] After graduating with a J.D. magna cum laude^[38] from Harvard in 1991, he returned to Chicago.^[35] Obama's election as the first black president of the Harvard Law Review gained national media attention^[31][36] and led to a publishing contract and advance for a book about race relations,^[39] which evolved into a personal memoir. The manuscript was published in mid-1995 as Dreams from My Father.^[39]

University of Chicago Law School and civil rights attorney[link]

In 1991, Obama accepted a two-year position as Visiting Law and Government Fellow at the University of Chicago Law School to work on his first book.^[39][40] He then taught at the University of Chicago Law School for twelve years—as a Lecturer from 1992 to 1996, and as a Senior Lecturer from 1996 to 2004—teaching constitutional law.^[41]

From April to October 1992, Obama directed Illinois's Project Vote, a voter registration campaign with ten staffers and seven hundred volunteer registrars; it achieved its goal of registering 150,000 of 400,000 unregistered African Americans in the state, leading Crain's Chicago Business to name Obama to its 1993 list of "40 under Forty" powers to be.^[42] In 1993, he joined Davis, Miner, Barnhill & Galland, a 13-attorney law firm specializing in civil rights litigation and neighborhood economic development, where he was an associate for three years from 1993 to 1996, then of counsel from 1996 to 2004. His law license became inactive in 2002.^[43]

From 1994 to 2002, Obama served on the boards of directors of the Woods Fund of Chicago, which in 1985 had been the first foundation to fund the Developing Communities Project; and of the Joyce Foundation.^[29] He served on the board of directors of the Chicago Annenberg Challenge from 1995 to 2002, as founding president and chairman of the board of directors from 1995 to 1999.^[29]

Legislative career: 1997–2008[link]

State Senator: 1997–2004[link]

Obama was elected to the Illinois Senate in 1996, succeeding State Senator Alice Palmer as Senator from Illinois's 13th District, which at that time spanned Chicago South Side neighborhoods from Hyde Park – Kenwood south to South Shore and west to Chicago Lawn.^[44] Once elected, Obama gained bipartisan support for legislation that reformed ethics and health care laws.^[45] He sponsored a law that increased tax credits for low-income workers, negotiated welfare reform, and promoted increased subsidies for childcare.^[46] In 2001, as co-chairman of the bipartisan Joint Committee on Administrative Rules, Obama supported Republican Governor Ryan's payday loan regulations and predatory mortgage lending regulations aimed at averting home foreclosures.^[47]

Obama was reelected to the Illinois Senate in 1998, defeating Republican Yesse Yehudah in the general election, and was reelected again in 2002.^[48] In 2000, he lost a Democratic primary run for the U.S. House of Representatives to four-term incumbent Bobby Rush by a margin of two to one.^[49]

In January 2003, Obama became chairman of the Illinois Senate's Health and Human Services Committee when Democrats, after a decade in the minority, regained a majority.^[50] He sponsored and led unanimous, bipartisan passage of legislation to monitor racial profiling by requiring police to record the race of drivers they detained, and legislation making Illinois the first state to mandate videotaping of homicide interrogations.^[46][51] During his 2004 general election campaign for U.S. Senate, police representatives credited Obama for his active engagement with police organizations in enacting death penalty reforms.^[52] Obama resigned from the Illinois Senate in November 2004 following his election to the U.S. Senate.^[53]

U.S. Senate campaign[link]

County results of the 2004 U.S. Senate race in Illinois. Counties in blue were won by Obama.

In May 2002, Obama commissioned a poll to assess his prospects in a 2004 U.S. Senate race; he created a campaign committee, began raising funds, and lined up political media consultant David Axelrod by August 2002. Obama formally announced his candidacy in January 2003.^[54]

Obama was an early opponent of the George W. Bush administration's 2003 invasion of Iraq.^[55] On October 2, 2002, the day President Bush and Congress agreed on the joint resolution authorizing the Iraq War,^[56] Obama addressed the first high-profile Chicago anti-Iraq War rally,^[57] and spoke out against the war.^[58] He addressed another anti-war rally in March 2003 and told the crowd that "it's not too late" to stop the war.^[59]

Decisions by Republican incumbent Peter Fitzgerald and his Democratic predecessor Carol Moseley Braun to not participate in the election resulted in wide-open Democratic and Republican primary contests involving fifteen candidates.^[60] In the March 2004 primary election, Obama won in an unexpected landslide—which overnight made him a rising star within the national Democratic Party, started speculation about a presidential future, and led to the reissue of his memoir, Dreams from My Father.^[61] In July 2004, Obama delivered the keynote address at the 2004 Democratic National Convention,^[62] seen by 9.1 million viewers. His speech was well received and elevated his status within the Democratic Party.^[63]

Obama's expected opponent in the general election, Republican primary winner Jack Ryan, withdrew from the race in June 2004.^[64] Six weeks later, Alan Keyes accepted the Republican nomination to replace Ryan.^[65] In the November 2004 general election, Obama won with 70 percent of the vote.^[66]

U.S. Senator: 2005–2008[link]

Obama was sworn in as a senator on January 3, 2005,^[67] becoming the only Senate member of the Congressional Black Caucus.^[68] CQ Weekly characterized him as a "loyal Democrat" based on analysis of all Senate votes in 2005–2007. Obama announced on November 13, 2008, that he would resign his Senate seat on November 16, 2008, before the start of the lame-duck session, to focus on his transition period for the presidency.^[69]

Legislation[link]

Obama cosponsored the Secure America and Orderly Immigration Act.^[70] He introduced two initiatives that bore his name: Lugar–Obama, which expanded the Nunn–Lugar cooperative threat reduction concept to conventional weapons;^[71] and the Federal Funding Accountability and Transparency Act of 2006, which authorized the establishment of USAspending.gov, a web search engine on federal spending.^[72] On June 3, 2008, Senator Obama—along with Senators Tom Carper, Tom Coburn, and John McCain—introduced follow-up legislation: Strengthening Transparency and Accountability in Federal Spending Act of 2008.^[73]

Obama sponsored legislation that would have required nuclear plant owners to notify state and local authorities of radioactive leaks, but the bill failed to pass in the full Senate after being heavily modified in committee.^[74] Regarding tort reform, Obama voted for the Class Action Fairness Act of 2005 and the FISA Amendments Act of 2008, which grants immunity from civil liability to telecommunications companies complicit with NSA warrantless wiretapping operations.^[75]

Obama and U.S. Sen. Richard Lugar (R-IN) visit a Russian facility for dismantling mobile-missiles (August 2005).^[76]

In December 2006, President Bush signed into law the Democratic Republic of the Congo Relief, Security, and Democracy Promotion Act, marking the first federal legislation to be enacted with Obama as its primary sponsor.^[77] In January 2007, Obama and Senator Feingold introduced a corporate jet provision to the Honest Leadership and Open Government Act, which was signed into law in September 2007.^[78] Obama also introduced Deceptive Practices and Voter Intimidation Prevention Act, a bill to criminalize deceptive practices in federal elections,^[79] and the Iraq War De-Escalation Act of 2007,^[80] neither of which was signed into law.

Later in 2007, Obama sponsored an amendment to the Defense Authorization Act to add safeguards for personality-disorder military discharges.^[81] This amendment passed the full Senate in the spring of 2008.^[82] He sponsored the Iran Sanctions Enabling Act supporting divestment of state pension funds from Iran's oil and gas industry, which has not passed committee; and co-sponsored legislation to reduce risks of nuclear terrorism.^[83] Obama also sponsored a Senate amendment to the State Children's Health Insurance Program, providing one year of job protection for family members caring for soldiers with combat-related injuries.^[84]

Committees[link]

Obama held assignments on the Senate Committees for Foreign Relations, Environment and Public Works, and Veterans' Affairs through December 2006.^[85] In January 2007, he left the Environment and Public Works committee and took additional assignments with Health, Education, Labor, and Pensions and Homeland Security and Governmental Affairs.^[86] He also became Chairman of the Senate's subcommittee on European Affairs.^[87] As a member of the Senate Foreign Relations Committee, Obama made official trips to Eastern Europe, the Middle East, Central Asia and Africa. He met with Mahmoud Abbas before Abbas became President of the Palestinian National Authority, and gave a speech at the University of Nairobi in which he condemned corruption within the Kenyan government.^[88]

Presidential campaigns[link]

2008 presidential campaign[link]

Obama stands on stage with his wife and daughters just before announcing his presidential candidacy in Springfield, Illinois, February 10, 2007.

President George W. Bush meets with President-elect Obama in the Oval Office on November 10, 2008.

On February 10, 2007, Obama announced his candidacy for President of the United States in front of the Old State Capitol building in Springfield, Illinois.^[89][90] The choice of the announcement site was viewed as symbolic because it was also where Abraham Lincoln delivered his historic "House Divided" speech in 1858.^[89][91] Obama emphasized issues of rapidly ending the Iraq War, increasing energy independence, and providing universal health care,^[92] in a campaign that projected themes of "hope" and "change".^[93]

A large number of candidates entered the Democratic Party presidential primaries. The field narrowed to a duel between Obama and Senator Hillary Rodham Clinton after early contests, with the race remaining close throughout the primary process but with Obama gaining a steady lead in pledged delegates due to better long-range planning, superior fundraising, dominant organizing in caucus states, and better exploitation of delegate allocation rules.^[94] On June 7, 2008, Clinton ended her campaign and endorsed Obama.^[95]

On August 23, Obama announced his selection of Delaware Senator Joe Biden as his vice presidential running mate.^[96] Biden was selected from a field speculated to include former Indiana Governor and Senator Evan Bayh and Virginia Governor Tim Kaine.^[97] At the Democratic National Convention in Denver, Colorado, Hillary Clinton called for her supporters to endorse Obama, and she and Bill Clinton gave convention speeches in his support.^[98] Obama delivered his acceptance speech, not at the center where the Democratic National Convention was held, but at Invesco Field at Mile High to a crowd of over 75,000; the speech was viewed by over 38 million people worldwide.^[99][100]

During both the primary process and the general election, Obama's campaign set numerous fundraising records, particularly in the quantity of small donations.^[101] On June 19, 2008, Obama became the first major-party presidential candidate to turn down public financing in the general election since the system was created in 1976.^[102]

McCain was nominated as the Republican candidate and the two engaged in three presidential debates in September and October 2008.^[103] On November 4, Obama won the presidency with 365 electoral votes to 173 received by McCain.^[104] Obama won 52.9 percent of the popular vote to McCain's 45.7 percent.^[105] He became the first African American to be elected president.^[106] Obama delivered his victory speech before hundreds of thousands of supporters in Chicago's Grant Park.^[107]

2012 presidential campaign[link]

On April 4, 2011, Obama announced his re-election campaign for 2012 in a video titled "It Begins with Us" that he posted on his website and filed election papers with the Federal Election Commission.^{[108][109][110]} As the incumbent president he ran almost unopposed in the Democratic Party presidential primaries,^[111] and on April 3, 2012, Obama had secured the 2778 convention delegates needed to win the Democratic nomination.^[112]

Presidency[link]

First days[link]

Barack Obama takes the oath of office as President of the United States.

The inauguration of Barack Obama as the 44th President, and Joe Biden as Vice President, took place on January 20, 2009. In his first few days in office, Obama issued executive orders and presidential memoranda directing the U.S. military to develop plans to withdraw troops from Iraq.^[113] He ordered the closing of the Guantanamo Bay detention camp,^[114] but Congress prevented the closure by refusing to appropriate the required funds.^{[115][116][117]} Obama reduced the secrecy given to presidential records,^[118] and changed procedures to promote disclosure under the Freedom of Information Act.^[119] He also reversed George W. Bush's ban on federal funding to foreign establishments that allow abortions.^[120]

Domestic policy[link]

The first bill signed into law by Obama was the Lilly Ledbetter Fair Pay Act of 2009, relaxing the statute of limitations for equal-pay lawsuits.^[121] Five days later, he signed the reauthorization of the State Children's Health Insurance Program (SCHIP) to cover an additional 4 million uninsured children.^[122] In March 2009, Obama reversed a Bush-era policy which had limited funding of embryonic stem cell research and pledged to develop "strict guidelines" on the research.^[123]

Barack Obama speaking at Joint session of Congress with Vice President Joe Biden and House Speaker Nancy Pelosi on February 24, 2009

Obama appointed two women to serve on the Supreme Court in the first two years of his Presidency. Sonia Sotomayor, nominated by Obama on May 26, 2009, to replace retiring Associate Justice David Souter, was confirmed on August 6, 2009,^[124] becoming the first Hispanic to be a Supreme Court Justice.^[125] Elena Kagan, nominated by Obama on May 10, 2010, to replace retiring Associate Justice John Paul Stevens, was confirmed on August 5, 2010, bringing the number of women sitting simultaneously on the Court to three, for the first time in American history.^[126]

On September 30, 2009, the Obama administration proposed new regulations on power plants, factories and oil refineries in an attempt to limit greenhouse gas emissions and to curb global warming.^[127][128]

On October 8, 2009, Obama signed the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, a measure that expands the 1969 United States federal hate-crime law to include crimes motivated by a victim's actual or perceived gender, sexual orientation, gender identity, or disability.^[129][130]

On March 30, 2010, Obama signed the Health Care and Education Reconciliation Act, a reconciliation bill which ends the process of the federal government giving subsidies to private banks to give out federally insured loans, increases the Pell Grant scholarship award, and makes changes to the Patient Protection and Affordable Care Act.^[131][132]

In a major space policy speech in April 2010, Obama announced a planned change in direction at NASA, the U.S. space agency. He ended plans for a return of human spaceflight to the moon and development of the Ares I rocket, Ares V rocket and Constellation program, in favor of funding Earth science projects, a new rocket type, and research and development for an eventual manned mission to Mars, and ongoing missions to the International Space Station.^[133]

On December 22, 2010, Obama signed the Don't Ask, Don't Tell Repeal Act of 2010, fulfilling a key promise made in the 2008 presidential campaign^[134][135] to end the Don't ask, don't tell policy of 1993 that had prevented gay and lesbian people from serving openly in the United States Armed Forces.^[136]

President Obama's 2011 State of the Union Address focused on themes of education and innovation, stressing the importance of innovation economics to make the United States more competitive globally. He spoke of a five-year freeze in domestic spending, eliminating tax breaks for oil companies and reversing tax cuts for wealthy Americans, banning congressional earmarks, and reducing healthcare costs. He promised that the United States would have one million electric vehicles on the road by 2015 and would be 80% reliant on "clean" electricity.^[137][138]

As a candidate for the Illinois state senate Obama had said in 1996 that he favored legalizing same-sex marriage;^[139] but by the time of his run for the U.S. senate in 2004, he said that while he supported civil unions and domestic partnerships for same-sex partners, for strategic reasons he opposed same-sex marriages.^[140] On May 9, 2012, shortly after the official launch of his campaign for re-election as president, Obama said his views had evolved, and he publicly affirmed his personal support for the legalization of same-sex marriage, becoming the first sitting U.S. president to do so.^[141][142]

Economic policy[link]

Obama presents his first weekly address as President of the United States on January 24, 2009, discussing the American Recovery and Reinvestment Act of 2009.

On February 17, 2009, Obama signed the American Recovery and Reinvestment Act of 2009, a $787 billion economic stimulus package aimed at helping the economy recover from the deepening worldwide recession.^[143] The act includes increased federal spending for health care, infrastructure, education, various tax breaks and incentives, and direct assistance to individuals,^[144] which is being distributed over the course of several years.

In March, Obama's Treasury Secretary, Timothy Geithner, took further steps to manage the financial crisis, including introducing the Public-Private Investment Program for Legacy Assets, which contains provisions for buying up to $2 trillion in depreciated real estate assets.^[145] Obama intervened in the troubled automotive industry^[146] in March 2009, renewing loans for General Motors and Chrysler to continue operations while reorganizing. Over the following months the White House set terms for both firms' bankruptcies, including the sale of Chrysler to Italian automaker Fiat^[147] and a reorganization of GM giving the U.S. government a temporary 60 percent equity stake in the company, with the Canadian government shouldering a 12 percent stake.^[148] In June 2009, dissatisfied with the pace of economic stimulus, Obama called on his cabinet to accelerate the investment.^[149] He signed into law the Car Allowance Rebate System, known colloquially as "Cash for Clunkers", that temporarily boosted the economy.^{[150][151][152]}

Although spending and loan guarantees from the Federal Reserve and the Treasury Department authorized by the Bush and Obama administrations totaled about $11.5 trillion, only $3 trillion had been spent by the end of November 2009.^[153] However, Obama and the Congressional Budget Office predicted that the 2010 budget deficit will be $1.5 trillion or 10.6 percent of the nation's gross domestic product (GDP) compared to the 2009 deficit of $1.4 trillion or 9.9 percent of GDP.^[154][155] For 2011, the administration predicted the deficit will slightly shrink to $1.34 trillion, while the 10-year deficit will increase to $8.53 trillion or 90 percent of GDP.^[156] The most recent increase in the U.S. debt ceiling to $16.4 trillion was signed into law on January 26, 2012.^[157] On August 2, 2011, after a lengthy congressional debate over whether to raise the nation's debt limit, Obama signed the bipartisan Budget Control Act of 2011. The legislation enforces limits on discretionary spending until 2021, establishes a procedure to increase the debt limit, creates a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years, and establishes automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings.^[158] By passing the legislation, Congress was able to prevent an unprecedented U.S. government default on its obligations.^[159]

Employment statistics (changes in unemployment rate and net jobs per month) during Obama's tenure as U.S. President^[160][161]

The unemployment rate rose in 2009, reaching a peak in October at 10.1 percent and averaging 10.0 percent in the fourth quarter. Following a decrease to 9.7 percent in the first quarter of 2010, the unemployment rate fell to 9.6 percent in the second quarter, where it remained for the rest of the year.^[162] Between February and December 2010, employment rose by 0.8 percent, which was less than the average of 1.9 percent experienced during comparable periods in the past four employment recoveries.^[163] GDP growth returned in the third quarter of 2009, expanding at a rate of 1.6 percent, followed by a 5.0 percent increase in the fourth quarter.^[164] Growth continued in 2010, posting an increase of 3.7 percent in the first quarter, with lesser gains throughout the rest of the year.^[164] In July 2010, the Federal Reserve expressed that although economic activity continued to increase, its pace had slowed, and Chairman Ben Bernanke stated that the economic outlook was "unusually uncertain."^[165] Overall, the economy expanded at a rate of 2.9 percent in 2010.^[166]

The Congressional Budget Office and a broad range of economists credit Obama's stimulus plan for economic growth.^[167][168] The CBO released a report stating that the stimulus bill increased employment by 1–2.1 million,^{[168][169][170][171]} while conceding that "It is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus package."^[167] Although an April 2010 survey of members of the National Association for Business Economics showed an increase in job creation (over a similar January survey) for the first time in two years, 73 percent of 68 respondents believed that the stimulus bill has had no impact on employment.^[172]

Within a month of the 2010 midterm elections, Obama announced a compromise deal with the Congressional Republican leadership that included a temporary, two-year extension of the 2001 and 2003 income tax rates, a one-year payroll tax reduction, continuation of unemployment benefits, and a new rate and exemption amount for estate taxes.^[173] The compromise overcame opposition from some in both parties, and the resulting $858 billion Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 passed with bipartisan majorities in both houses of Congress before Obama signed it on December 17, 2010.^[174]

Health care reform[link]

Barack Obama signs the Patient Protection and Affordable Care Act at the White House, March 23, 2010

Obama called for Congress to pass legislation reforming health care in the United States, a key campaign promise and a top legislative goal.^[175] He proposed an expansion of health insurance coverage to cover the uninsured, to cap premium increases, and to allow people to retain their coverage when they leave or change jobs. His proposal was to spend $900 billion over 10 years and include a government insurance plan, also known as the public option, to compete with the corporate insurance sector as a main component to lowering costs and improving quality of health care. It would also make it illegal for insurers to drop sick people or deny them coverage for pre-existing conditions, and require every American carry health coverage. The plan also includes medical spending cuts and taxes on insurance companies that offer expensive plans.^[176][177]

On July 14, 2009, House Democratic leaders introduced a 1,017-page plan for overhauling the U.S. health care system, which Obama wanted Congress to approve by the end of 2009.^[175] After much public debate during the Congressional summer recess of 2009, Obama delivered a speech to a joint session of Congress on September 9 where he addressed concerns over the proposals.^[178] In March 2009, Obama lifted a ban on stem cell research.^[179]

On November 7, 2009, a health care bill featuring the public option was passed in the House.^[180][181] On December 24, 2009, the Senate passed its own bill—without a public option—on a party-line vote of 60–39.^[182] On March 21, 2010, the Patient Protection and Affordable Care Act passed by the Senate in December was passed in the House by a vote of 219 to 212.^[183] Obama signed the bill into law on March 23, 2010.^[184]

The Patient Protection and Affordable Care Act includes health-related provisions to take effect over four years, including expanding Medicaid eligibility for people making up to 133 percent of the federal poverty level (FPL) starting in 2014,^[185] subsidizing insurance premiums for people making up to 400 percent of the FPL ($88,000 for family of four in 2010) so their maximum "out-of-pocket" payment for annual premiums will be from 2 to 9.5 percent of income,^[186][187] providing incentives for businesses to provide health care benefits, prohibiting denial of coverage and denial of claims based on pre-existing conditions, establishing health insurance exchanges, prohibiting annual coverage caps, and support for medical research. According to White House and Congressional Budget Office figures, the maximum share of income that enrollees would have to pay would vary depending on their income relative to the federal poverty level.^[186][188]

The costs of these provisions are offset by taxes, fees, and cost-saving measures, such as new Medicare taxes for those in high-income brackets, taxes on indoor tanning, cuts to the Medicare Advantage program in favor of traditional Medicare, and fees on medical devices and pharmaceutical companies;^[189] there is also a tax penalty for those who do not obtain health insurance, unless they are exempt due to low income or other reasons.^[190] In March, 2010, the Congressional Budget Office estimated that the net effect of both laws will be a reduction in the federal deficit by $143 billion over the first decade.^[191]

In March 2012, the Supreme Court heard arguments by a coalition of 26 states maintaining that it is unconstitutional to force individuals to buy health insurance.^[192]

Gulf of Mexico oil spill[link]

On April 20, 2010, an explosion destroyed an offshore drilling rig at the Macondo Prospect in the Gulf of Mexico, causing a major sustained oil leak. The well's operator, BP, initiated a containment and cleanup plan, and began drilling two relief wells intended to stop the flow. Obama visited the Gulf on May 2 among visits by members of his cabinet, and again on May 28 and June 4. On May 22, he announced a federal investigation and formed a bipartisan commission to recommend new safety standards, after a review by Secretary of the Interior Ken Salazar and concurrent Congressional hearings. On May 27, he announced a 6-month moratorium on new deepwater drilling permits and leases, pending regulatory review.^[193] As multiple efforts by BP failed, some in the media and public expressed confusion and criticism over various aspects of the incident, and stated a desire for more involvement by Obama and the federal government.^[194]

Foreign policy[link]

Barack Obama speaking on "A New Beginning" at Cairo University on June 4, 2009

In February and March, Vice President Joe Biden and Secretary of State Hillary Rodham Clinton made separate overseas trips to announce a "new era" in U.S. foreign relations with Russia and Europe, using the terms "break" and "reset" to signal major changes from the policies of the preceding administration.^[195] Obama attempted to reach out to Arab leaders by granting his first interview to an Arab cable TV network, Al Arabiya.^[196]

On March 19, Obama continued his outreach to the Muslim world, releasing a New Year's video message to the people and government of Iran.^[197] This attempt at outreach was rebuffed by the Iranian leadership.^[198] In April, Obama gave a speech in Ankara, Turkey, which was well received by many Arab governments.^[199] On June 4, 2009, Obama delivered a speech at Cairo University in Egypt calling for "a new beginning" in relations between the Islamic world and the United States and promoting Middle East peace.^[200]

On June 26, 2009, in response to the Iranian government's actions towards protesters following Iran's 2009 presidential election, Obama said: "The violence perpetrated against them is outrageous. We see it and we condemn it."^[201] On July 7, while in Moscow, he responded to a Vice President Biden comment on a possible Israeli military strike on Iran by saying: "We have said directly to the Israelis that it is important to try and resolve this in an international setting in a way that does not create major conflict in the Middle East."^[202]

British Prime Minister David Cameron and Barack Obama, during the 2010 G-20 Toronto summit.

On September 24, 2009, Obama became the first sitting U.S. president to preside over a meeting of the United Nations Security Council.^[203]

In March 2010, Obama took a public stance against plans by the government of Israeli Prime Minister Benjamin Netanyahu to continue building Jewish housing projects in predominantly Arab neighborhoods of East Jerusalem.^[204][205] During the same month, an agreement was reached with the administration of Russian President Dmitry Medvedev to replace the 1991 Strategic Arms Reduction Treaty with a new pact reducing the number of long-range nuclear weapons in the arsenals of both countries by about one-third.^[206] The New START treaty was signed by Obama and Medvedev in April 2010, and was ratified by the U.S. Senate in December 2010.^[207]

On December 6, 2011, he instructed agencies to consider LGBT rights when issuing financial aid to foreign countries.^[208]

Iraq War[link]

On February 27, 2009, Obama declared that combat operations in Iraq would end within 18 months. His remarks were made to a group of Marines preparing for deployment to Afghanistan. Obama said, "Let me say this as plainly as I can: By August 31, 2010, our combat mission in Iraq will end."^[209] The Obama administration scheduled the withdrawal of combat troops to be completed by August 2010, decreasing troops levels from 142,000 while leaving a transitional force of 35,000 to 50,000 in Iraq until the end of 2011. On August 19, 2010, the last United States combat brigade exited Iraq. The plan is to transition the mission of the remaining troops from combat operations to counter-terrorism and the training, equipping, and advising of Iraqi security forces.^[210][211] On August 31, 2010, Obama announced that the United States combat mission in Iraq was over.^[212] On October 21, 2011 President Obama announced that all U.S. troops would leave Iraq in time to be, "home for the holidays".^[213]

War in Afghanistan[link]

Early in his presidency, Obama moved to bolster U.S. troop strength in Afghanistan.^[214] He announced an increase to U.S. troop levels of 17,000 in February 2009 to "stabilize a deteriorating situation in Afghanistan", an area he said had not received the "strategic attention, direction and resources it urgently requires".^[215] He replaced the military commander in Afghanistan, General David D. McKiernan, with former Special Forces commander Lt. Gen. Stanley A. McChrystal in May 2009, indicating that McChrystal's Special Forces experience would facilitate the use of counterinsurgency tactics in the war.^[216] On December 1, 2009, Obama announced the deployment of an additional 30,000 military personnel to Afghanistan.^[217] He also proposed to begin troop withdrawals 18 months from that date.^[218][219] McChrystal was replaced by David Petraeus in June 2010, after McChrystal's staff criticized White House personnel in a magazine article.^[220]

Israel[link]

Obama meeting with Israeli President Shimon Peres, 2009

During the initial years of the Obama administration, the U.S. increased military cooperation with Israel, including a record number of U.S. troops participating in military exercises in the country, increased military aid, the re-establishment of the U.S.-Israeli Joint Political Military Group and the Defense Policy Advisory Group, and an increase in visits among high-level military officials of both countries, including Ehud Barak and Admiral Mike Mullen.^[221]

In 2011, the United States vetoed a Security Council resolution condemning Israeli settlements, with the United States being the only nation to do so.^[222] Obama supports the two-state solution to the Arab–Israeli conflict based on the 1967 borders with land swaps.^[223]

War in Libya[link]

In March 2011, as forces loyal to Muammar Gaddafi advanced on rebels across Libya, calls for a no-fly zone came from around the world, including Europe, the Arab League, and a resolution^[224] passed unanimously by the U.S. Senate.^[225] In response to the unanimous passage of United Nations Security Council Resolution 1973 on March 17, Gaddafi who had previously vowed to "show no mercy" to the citizens of Benghazi^[226]—announced an immediate cessation of military activities,^[227] yet reports came in that his forces continued shelling Misrata. The next day, on Obama's orders, the U.S. military took a lead role in air strikes to destroy the Libyan government's air defense capabilities in order to protect civilians and enforce a no-fly-zone,^[228] including the use of Tomahawk missiles, B-2 Spirits, and fighter jets.^{[229][230][231]} Six days later, on March 25, by unanimous vote of all of its 28 members, NATO took over leadership of the effort, dubbed Operation Unified Protector.^[232] Some Representatives^[233] questioned whether Obama had the constitutional authority to order military action in addition to questioning its cost, structure and aftermath.^[234][235]

Osama bin Laden[link]

Obama and the U.S. national security team gathered in the Situation Room to monitor the military operation resulting in the death of Osama bin Laden on May 1, 2011.

Starting with information received in July 2010, intelligence developed by the CIA over the next several months determined what they believed to be the location of Osama bin Laden in a large compound in Abbottabad, Pakistan, a suburban area 35 miles from Islamabad.^[236] CIA head Leon Panetta reported this intelligence to President Obama in March 2011.^[236] Meeting with his national security advisers over the course of the next six weeks, Obama rejected a plan to bomb the compound, and authorized a "surgical raid" to be conducted by United States Navy SEALs.^[236] The operation took place on May 1, 2011, resulting in the death of bin Laden and the seizure of papers and computer drives and disks from the compound.^[237][238] Bin Laden's body was identified through DNA testing,^[239] and buried at sea several hours later.^[240] Within minutes of the President's announcement from Washington, DC, late in the evening on May 1, there were spontaneous celebrations around the country as crowds gathered outside the White House, and at New York City's Ground Zero and Times Square.^[237][241] Reaction to the announcement was positive across party lines, including from former Presidents Bill Clinton and George W. Bush,^[242] and from many countries around the world.^[243]

2010 midterm election[link]

Obama called the November 2, 2010 election, where the Democratic Party lost 63 seats in, and control of, the House of Representatives,^[244] "humbling" and a "shellacking".^[245] He said that the results came because not enough Americans had felt the effects of the economic recovery.^[246]

Cultural and political image[link]

Obama conducting the first completely virtual interview from the White House in 2012^[247]

Obama's family history, upbringing, and Ivy League education differ markedly from those of African American politicians who launched their careers in the 1960s through participation in the civil rights movement.^[248] Obama is also not a descendant of American slaves.^[249] Expressing puzzlement over questions about whether he is "black enough", Obama told an August 2007 meeting of the National Association of Black Journalists that "we're still locked in this notion that if you appeal to white folks then there must be something wrong".^[250] Obama acknowledged his youthful image in an October 2007 campaign speech, saying: "I wouldn't be here if, time and again, the torch had not been passed to a new generation."^[251]

Obama is frequently referred to as an exceptional orator.^[252] During his pre-inauguration transition period and continuing into his presidency, Obama has delivered a series of weekly Internet video addresses.^[253]

According to the Gallup Organization, Obama began his presidency with a 68 percent approval rating^[254] before gradually declining for the rest of the year, and eventually bottoming out at 41 percent in August 2010,^[255] a trend similar to Ronald Reagan's and Bill Clinton's first years in office.^[256] He experienced a small poll bounce shortly after the death of Osama bin Laden, which lasted until around June 2011, when his approval numbers dropped back to where they were prior to the operation.^{[257][258][259]} Polls show strong support for Obama in other countries,^[260] and before being elected President he has met with prominent foreign figures including then-British Prime Minister Tony Blair,^[261] Italy's Democratic Party leader and then Mayor of Rome Walter Veltroni,^[262] and French President Nicolas Sarkozy.^[263]

Obama talks with pub-goers as the First Lady draws a pint of stout at the Ollie Hayes pub in Moneygall, Ireland, in 2011

In a February 2009 poll conducted by Harris Interactive for France 24 and the International Herald Tribune, Obama was rated as the most respected world leader, as well as the most powerful.^[264] In a similar poll conducted by Harris in May 2009, Obama was rated as the most popular world leader, as well as the one figure most people would pin their hopes on for pulling the world out of the economic downturn.^[265][266]

Obama won Best Spoken Word Album Grammy Awards for abridged audiobook versions of Dreams from My Father in February 2006 and for The Audacity of Hope in February 2008.^[267] His concession speech after the New Hampshire primary was set to music by independent artists as the music video "Yes We Can", which was viewed 10 million times on YouTube in its first month^[268] and received a Daytime Emmy Award.^[269] In December 2008, Time magazine named Obama as its Person of the Year for his historic candidacy and election, which it described as "the steady march of seemingly impossible accomplishments".^[270]

On October 9, 2009, the Norwegian Nobel Committee announced that Obama had won the 2009 Nobel Peace Prize "for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples".^[271] Obama accepted this award in Oslo, Norway on December 10, 2009, with "deep gratitude and great humility."^[272] The award drew a mixture of praise and criticism from world leaders and media figures.^[273][274] Obama is the fourth U.S. president to be awarded the Nobel Peace Prize and the third to become a Nobel laureate while in office.

Family and personal life[link]

Barack Obama posing in the White House with wife Michelle and daughters Sasha and Malia in 2009

In a 2006 interview, Obama highlighted the diversity of his extended family: "It's like a little mini-United Nations", he said. "I've got relatives who look like Bernie Mac, and I've got relatives who look like Margaret Thatcher."^[275] Obama has a half-sister with whom he was raised, Maya Soetoro-Ng, the daughter of his mother and her Indonesian second husband and seven half-siblings from his Kenyan father's family – six of them living.^[276] Obama's mother was survived by her Kansas-born mother, Madelyn Dunham,^[277] until her death on November 2, 2008,^[278] two days before his election to the Presidency. Obama also has roots in Ireland; he met with his Irish cousins in Moneygall in May 2011.^[279] In Dreams from My Father, Obama ties his mother's family history to possible Native American ancestors and distant relatives of Jefferson Davis, President of the Confederate States of America during the American Civil War.^[280]

Obama was known as "Barry" in his youth, but asked to be addressed with his given name during his college years.^[281] Besides his native English, Obama speaks Indonesian at the conversational level, having learned the language during his four childhood years in Jakarta.^[282] He plays basketball, a sport he participated in as a member of his high school's varsity team.^[283]

Obama taking a shot during a game on the White House basketball court, 2009

Obama is a well known supporter of the Chicago White Sox, and threw out the first pitch at the 2005 ALCS when he was still a senator.^[284] In 2009, he threw out the ceremonial first pitch at the all star game while wearing a White Sox jacket.^[285] He is also primarily a Chicago Bears fan in the NFL, but in his childhood and adolescence was a fan of the Pittsburgh Steelers, and recently rooted for them ahead of their victory in Super Bowl XLIII 12 days after Obama took office as President.^[286] In 2011, Obama invited the 1985 Bears to the White House; in 1986, the team did not attend due to the Space Shuttle Challenger disaster.^[287]

In June 1989, Obama met Michelle Robinson when he was employed as a summer associate at the Chicago law firm of Sidley Austin.^[288] Assigned for three months as Obama's adviser at the firm, Robinson joined him at group social functions, but declined his initial requests to date.^[289] They began dating later that summer, became engaged in 1991, and were married on October 3, 1992.^[290] The couple's first daughter, Malia Ann, was born on July 4, 1998,^[291] followed by a second daughter, Natasha ("Sasha"), on June 10, 2001.^[292] The Obama daughters attended the private University of Chicago Laboratory Schools. When they moved to Washington, D.C., in January 2009, the girls started at the private Sidwell Friends School.^[293] The Obamas have a Portuguese Water Dog named Bo, a gift from Senator Ted Kennedy.^[294]

Applying the proceeds of a book deal, the family moved in 2005 from a Hyde Park, Chicago condominium to a $1.6 million house in neighboring Kenwood, Chicago.^[295] The purchase of an adjacent lot—and sale of part of it to Obama by the wife of developer, campaign donor and friend Tony Rezko—attracted media attention because of Rezko's subsequent indictment and conviction on political corruption charges that were unrelated to Obama.^[296]

In December 2007, Money magazine estimated the Obama family's net worth at $1.3 million.^[297] Their 2009 tax return showed a household income of $5.5 million—up from about $4.2 million in 2007 and $1.6 million in 2005—mostly from sales of his books.^[298][299] On his 2010 income of $1.7 million, he gave 14 percent to non-profit organizations, including $131,000 to Fisher House Foundation, a charity assisting wounded veterans' families, allowing them to reside near where the veteran is receiving medical treatments.^[300][301]

As per the latest financial disclosure, Obama may be worth as much as $10 million.^[302]

Obama tried to quit smoking several times, sometimes using nicotine replacement therapy, and, in early 2010, Michelle Obama said that he had successfully quit smoking.^[303][304]

Religious views[link]

Obama is a Christian whose religious views developed in his adult life. He wrote in The Audacity of Hope that he "was not raised in a religious household". He described his mother, raised by non-religious parents (whom Obama has specified elsewhere as "non-practicing Methodists and Baptists"), to be detached from religion, yet "in many ways the most spiritually awakened person that I have ever known". He described his father as "raised a Muslim", but a "confirmed atheist" by the time his parents met, and his stepfather as "a man who saw religion as not particularly useful". Obama explained how, through working with black churches as a community organizer while in his twenties, he came to understand "the power of the African-American religious tradition to spur social change".^[305]

In an interview with the evangelical periodical Christianity Today, Obama stated: "I am a Christian, and I am a devout Christian. I believe in the redemptive death and resurrection of Jesus Christ. I believe that that faith gives me a path to be cleansed of sin and have eternal life."^[306]

On September 27, 2010, Obama released a statement commenting on his religious views saying "I'm a Christian by choice. My family didn't—frankly, they weren't folks who went to church every week. And my mother was one of the most spiritual people I knew, but she didn't raise me in the church. So I came to my Christian faith later in life, and it was because the precepts of Jesus Christ spoke to me in terms of the kind of life that I would want to lead—being my brothers' and sisters' keeper, treating others as they would treat me."^[307][308]

Obama was baptized at the Trinity United Church of Christ, a black liberation church, in 1988, and was an active member there for two decades.^[309] Obama resigned from Trinity during the Presidential campaign after controversial statements made by Rev. Jeremiah Wright became public.^[310] After a prolonged effort to find a church to attend regularly in Washington, Obama announced in June 2009 that his primary place of worship would be the Evergreen Chapel at Camp David.^[311]

Notes[link]