Bankruptcy

The Beginnings of Bankruptcy

By writer

In the United States, bankruptcy laws were established under civil code in 1800 when Americans were faced with a difficult economy, such as what is currently happening. Modern bankruptcy is based on Article 1, Section 8 of the United States Constitution that gives Congress the exclusive power “to establish uniform laws on the subject of bankruptcies throughout the United States.” Bankruptcy laws are designed to provide a fresh start for individuals either by discharge of debt or reorganization.

In 1978, The Bankruptcy Reform Act was passed in the U.S., which made it easier for individuals to dissolve debts or reorganize. The Bankruptcy Reform Act is important since it allows people to cut their losses and spend, which stimulates the economy. Congress has recently enacted tougher, bankruptcy laws making it more difficult for individuals to gain bankruptcy protection. However, with the help of an experienced bankruptcy attorney, you can make Chapter 7 or Chapter 13 bankruptcy work for you. That is exactly who you will deal with when you set up an appointment with one of the knowledgeable bankruptcy attorneys at www.legalhelpers.com.

However, the idea of bankruptcy is as old as the Bible. In a version of the Old Testament from around 1400 B.C.E. (Before the Common Era) Moses declared every 50 years a ?Jubilee Year?, during which all debts would be canceled, land that had been sold would be returned to the original owner and Israelites who had sold themselves into slavery were to be set free.

Some 200 years later, the Greeks were not so forgiving. If a debtor owed a debt that could not be paid, his entire family and servants became ?debt slaves?. This period of slavery normally lasted for five years.

During approximately the same time period, the root of the word ?bankruptcy? was coined in Italy. When a man refused to pay his debts, his creditors would enter his house or workplace and destroy his workbench. In Italian broken bench is “banca rotta”. That set of words forms the word ?bankruptcy?. It does seem rather counterintuitive to destroy a person?s mode of earning if he owes you money, but there you go!

The first so-called bankruptcy laws were established in England in 1542 under the reign of Henry VIII. Bankruptcy was considered a criminal offense where debtors were sentenced to incarceration or death. In modern times, the bankruptcy laws in England are still fairly strict and debtors are not left with much property. Job loss, divorce, medical expenses or the rise of interest rates on credit cards or loans could leave an English debtor in a very ?dicey? situation.

Don?t leave your bankruptcy protection rights back in the Middle Ages. Please visit www.legalhelpers.com today for the bankruptcy advice you need.

Full post as published by Consumer Bankruptcy Blog from Legal Helpers on August 04, 2009 (boomark / email).