The first official laws regarding bankruptcy were passed under Henry VIII in 1542. During this time, becoming bankrupt meant being labeled a criminal and being subjected to criminal punishment. Today the repercussions of bankruptcy are not nearly as harsh. Every day hundreds of people face serious financial dilemmas and seek bankruptcy information in an effort to get out of considerable amounts of debt. But it has taken over a century for this legal procedure to gain acceptance among American society.
After the first bankruptcy laws were repealed in 1803, 1843 and 1878, the Bankruptcy Act of 1898 was finally passed. It gave companies in distress the option of being protected from creditors. This and other acts helped many companies through the Great Depression. Still, these early laws were rigid and pertained primarily to businesses. In 1978, another bankruptcy reform law was passed that made it easier for both businesses and individuals to acquire bankruptcy information and to file for bankruptcy.
During the eighties and nineties, other bankruptcy reforms relieved bankruptcy lawyers of some power, due to the fact that the Supreme Court believed these judges' powers overlapped the powers of certain branches of government. This reform also gave family farms the option to file for bankruptcy as well. Since then, there have been more use for examiners and mediators in bankruptcy court cases and provisions have been implemented to ensure proper proceedings. In 1997, an extensive review of bankruptcy reform was completed by the National Bankruptcy Review to assess its effectiveness. Today, bankruptcy has been transformed from a form of criminal punishment into a user-friendly financial tool used by many individuals and businesses, particularly since Sept.11, 2001 when many people were faced with tremendous financial loss.
This is not to say that bankruptcy is a get out of jail free card. Bankruptcy is a last-resort option for those who are drowning in debt.
For more bankruptcy information to explain the pros and cons behind filing for bankruptcy, do some research on the Internet or in your community. The type of bankruptcy information you obtain will depend on where you get it from. Try finding a neutral source such as a consumer guide or a law school library. As most of us know, bankruptcy law consists of developing a plan that allows you, the debtor, to resolve your debts through the supervised division of your assets among your creditors. Certain bankruptcy proceedings can allow you to stay in business and use generated revenue to resolve your debts. Bankruptcy laws can also discharge certain debtors from financial obligations after their assets are distributed, even if their debts have not been paid in full.
Because filing for bankruptcy is known for being hopelessly complex and confusing to the average person, it is recommended that you consult a bankruptcy lawyer for bankruptcy information to make sure you are doing everything correctly.
Before you invest in a bankruptcy lawyer, however, there are many useful websites that can help you by providing useful, preliminary bankruptcy information. Online bankruptcy libraries offer articles, books, state-by-state bankruptcy laws, recent bankruptcy court decisions and much more related to bankruptcy proceedings.
By Kelley Caner