Bankruptcy Lawyers on Historical Events in Bankruptcy
As experienced bankruptcy lawyers in Springfield, MO, the legal aid team at Groce & DeArmon, P.C. knows that bankruptcy has a long and storied history. The concept of debt and repayment stretches far back into history, and we want to take a look at some of the major historical examples of bankruptcy to give you an idea of how prevalent it’s always been.
Debt in Ancient Greece
We can find references to the concepts of lending money and owing debt all the way back to the Old Testament, with the elimination of all debt in the Jubilee Year. In Deuteronomy, we see an even more specific example of debt forgiveness with the introduction of the seven-year rule, which defined that as a period of the Lord’s forgiveness of all debt.
But, looking at ancient Greece, we see some of the first truly harsh punishments for unpaid debt. In their society, the Greeks had no time for forgiving debt and would take an entire family as debt slaves if they couldn’t pay back what they owed. If you’re stressed by the idea of seeking help from a bankruptcy lawyer, just be glad of how much things have changed. It could be much worse!
It wasn’t until much later, during the medieval period, that official laws for bankruptcy were introduced. In the 1540s, those who were declared bankrupt were treated as outright criminals, often being sentenced to debtor’s prison, or even death. Thankfully, this changed as time went on and with the establishment of a more organized, concrete banking system – not just in Britain, but across Europe. The Eighteenth Century saw the introduction of more familiar bankruptcy laws, with the debts being written off and debtors simply ordered to pay back all they could afford.
US Bankruptcy Laws in the 1800s
Bankruptcy laws in the US were somewhat inconsistent, usually temporary measures, until the financial upheaval caused by the Civil War. Just before, and then following the war, new bankruptcy laws were introduced that included the discharging of debt.
However, unlike the bankruptcy law that our bankruptcy lawyers and attorneys are familiar with now, early laws favored the creditors much more than the debtors, meaning that the priority was in them getting their money back.
This often led to much harsher penalties for those who had filed, and the majority of bankruptcy filings were involuntary. This harsh treatment might explain many people’s hesitation, even now, in filing bankruptcy, seeing it as a punishment rather than a chance to start over.
The 1900s, The Great Depression, and a Shifting Focus
It’s not a surprise to learn that the Great Depression of the early 20th century in the US resulted in some significant changes to bankruptcy, both legally in the public perception. The Bankruptcy Acts of the 1930s, following the fallout of immense economic turmoil, were put in place to shift the focus of debt from paying back to creditors to offering the “clean slate” that many bankruptcy lawyers will refer to bankruptcy as now.
The 1970s and Modern Bankruptcy
The 1970s saw a further shake-up of bankruptcy law in the US. The renewed bankruptcy law of the late ‘70s created significant controversy as judges were given more power in bankruptcy cases. It took only a few years for these powers to be rolled back in the early 1980s.
Throughout the 1980s, bankruptcy legislation was modified to adapt to a renewed energy in the economy, making it easier for businesses of individuals to file bankruptcy. Unfortunately, the fast-pace of finance in the ‘80s and into the ‘90s saw record numbers of people filing bankruptcy, not to mention many major businesses and established companies. However, the amount of cases filed also resulted in further changes to speed up the process.
Bankruptcy Lawyers Advice on the Future of Bankruptcy Law
Into the 2000s, changes to bankruptcy laws were still being made. Provisions made in the ‘90s were thought, by some, to make it easier for applicants to cheat their way out of their debts, and guidelines became more strict as late as 2007.
What this shows us is that, like anything related to the law or finance, bankruptcy has a complicated history. Laws continue to be pulled one way or another in a tug of war between debtors and creditors, and it’s hard to keep up with what’s happening if you’re focused on repaying your debts.
Our bankruptcy lawyers are experts in the field and can do the hard work for you, as well as offer professional, educated advice every step of the way. Contact Groce & DeArmon, P.C.’s bankruptcy lawyers today.