From Thomas Jefferson Encyclopedia
Thomas Jefferson had substantial debt throughout his life. In this era, a person could not declare bankruptcy and it was his reputation in large part that kept creditors at bay. While debt was not unusual for Virginia planters of his time, his eventually grew so ponderous that after Jefferson's death, his grandson and executor of his estate, Thomas Jefferson Randolph, posted an advertisement for his estate sale, indicating that Jefferson's debts at his death amounted to $107,000. Of course, in today's money that would translate into a much larger figure. Estimates can vary, but the figure is somewhere in the range of $1-2 million.
There are a few reasons behind the accumulation of debt:
1. Jefferson inherited a great deal of debt from his father-in-law, John Wayles, when Wayles died in 1774.
2. Although Jefferson was wealthy in land and slaves, farming proved to be an unreliable and inadequate source of income. Also, although Jefferson himself was a major creditor, payments owed to him were unreliable and inadequate as well.
3. Jefferson lived beyond his means. Jefferson bought many things while in France, and still purchased books, fine furnishings, expensive wines or other items.
4. Jefferson lived to be 83. Had he died sooner, he would not have been so deeply in debt. The financial panic that occurred in 1819 added a substantial burden onto his already-substantial debt. Also, he acquired debt from a friend in particular late in life. In 1818, Jefferson endorsed a $20,000 note for Wilson Cary Nicholas. Nicholas died in 1820, and Jefferson was stuck paying it.
Sloan, Herbert. Principle and Interest: Thomas Jefferson and the Problem of Debt, New York: Oxford University Press, 1995.