Bankruptcy helps people who need a fresh start in life. When you are overwhelmed with medical bills, your business is floundering, you’ve recently suffered a job loss, or you are dealing with a host of other reasons, The Law Offices of Loomis & Greene near Berthoud can help. We offer comprehensive bankruptcy services to help you every step of the way. We understand how difficult declaring bankruptcy can be, and we’re here to help. Below, we’ll take a look at the history of bankruptcy in the United States. Contact us today for a free consultation!
HISTORY OF BANKRUPTCY IN THE UNITED STATES
Since the United States was settled by the British primarily, the American colonies took many cues from the English, including the contemptuous beliefs of looking down upon those who could not pay their debts. Similar to Britain and most of Europe during the early colonial period, those in the colonies also faced prison, flogging, and other shaming practices, such as cutting hair, branding the letter “T” on them, or publicly piercing their ear before cutting it off if you failed to pay your debts. Remember, these are the same people who perpetrated the Salem Witch Trials.
A little known fact that many people do not know is that the writers of the US Constitution gave Congress the power to enact laws specifically for bankruptcies. This referred mainly to businesses, however.
Debtor prisons existed in the United States as well, with the first official bankruptcy law not being enacted until after the American Revolution in 1800 in response to panic in the markets that affected businesses. These early bankruptcies were involuntary, and there were no bankruptcy attorneys, such as The Law Offices of Loomis & Greene near Berthoud, to advocate for debtors. However, this law was quickly repealed in 1803, leading to two more bankruptcy laws that were passed and then repealed as well throughout the nineteenth century. However, these laws did allow for the discharge of debts instead of having to suffer permanent disfigurement as before. These laws heavily favored the creditor with the debtor still suffering severe consequences, including social stigmas. However, voluntary petitions were granted, which was progress in the right direction.
More cool little known facts are that two of the signers of the Constitution were heavily in debt and suffered greatly because of it. Robert Morris spent more than three years in debtors’ prison, while James Wilson had to flee Pennsylvania in order to avoid prison.
Congress’s fourth attempt at a bankruptcy law for the United States finally stuck. The Bankruptcy Act of 1898 was the law of the land until it was updated in 1978. Creditors no longer had to give consent to discharge debts, and it allowed for exemptions of some of the debtor’s assets.
Bankruptcy and the Change in Stigmatism
As more consumers take on debt and the fact of the matter becomes that it is this debt that drives the United States’s economy, the stigmatism of bankruptcy has diminished somewhat. Many bankruptcies today are caused by an event that is out of the person’s control, such as astronomical medical bills due to an illness or an injury, a job layoff, or another financial crisis that has affected that person’s ability to pay back their loans. This has shifted law to protect the debtor more so than the creditor, so the debtor can get a fresh start in life. While no one goes into debt with the end game in mind of being bankrupt, it does happen — and it can happen to you.
There are some who are out to play the game, as there are in all types of industries where fraud can be applied. For these people looking to take advantage of the bankruptcy law, harsh penalties exist. However, the vast majority of bankruptcy cases in the United States are from people and companies looking to start over from drowning in debt. Now, bankruptcy is more rehabilitative than penal.
PARTNERING WITH THE RIGHT BANKRUPTCY ATTORNEYS
The Law Offices of Loomis & Greene in Berthoud advocate for our clients personal or business bankruptcy. You will find our bankruptcy lawyers compassionate and non-judgmental of your journey to declare bankruptcy. Our mission is to help you get a fresh start, and filing for Chapter 7, Chapter 11, or Chapter 13 bankruptcy can be the way to go. Our expert and experienced bankruptcy lawyers can guide you to make the right decision for you.
In addition to superb bankruptcy lawyer representation, we also offer excellent criminal law and divorce and family law representation. Our mission is to help you through some of the most difficult times in your life, whether you are in the midst of a heart-breaking divorce or you have been arrested for domestic violence. When you need help, we’re the ones to call. Contact us today!