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Why did Daniel Defoe go bankrupt in 1692?
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Daniel Defoe
Daniel Defoe, engraving by M. Van der Gucht, after a portrait by J. Taverner, first half of the 18th century.
In 1692, the English author Daniel Defoe went bankrupt for £17,000. While Defoe himself admitted to engaging in rash speculations and projects, the primary cause of his financial collapse was the significant loss he sustained while insuring ships during the war with France. He was one of 19 merchants who were ruined as "merchants insurers" that year.1
Despite this setback, Defoe acted honorably toward his creditors, managing to pay off all but £5,000 of his debt within a decade.1