history of bankruptcy law office of loomis & greene loveland

Ever since there has been debt, there have been people who can’t pay their debt and need some kind of solution. In the past, the solutions were grim to put it lightly. From jail to death to giving up a member of your family, settling debts in the past was not exactly something you wanted to have to deal with.

Thankfully, you now can count on top-notch bankruptcy lawyers such as The Law Offices of Loomis & Greene near Longmont to provide solutions when you need help with your debt. Below, we’ll take a look at the history of bankruptcy. Contact us today to get started!

HISTORY OF BANKRUPTCY

The underlying need of bankruptcy has been around since debt; however, the idea of providing help to others who are in debt has been around since the Old Testament days, appearing first in the Bible as written law. Back in the times of Moses (around 1300 BC), the Israelites were instructed to forgive the debts that they were owed by others every seven years. In fact, these seven years are where Chapter 7 bankruptcy comes from and why it takes seven years for your bankruptcy to clear your credit report.

The idea of a bankruptcy law then made its way to ancient Greece and Rome. Greek law stated that those who couldn’t pay their debts could be forced into slavery, including the man’s wife and children. However, Roman law stipulated that a debtor’s body could be dismembered and distributed to creditors as payment. While this law was rarely carried out, it’s easy to see into the mentality of debtors in ancient times, which would stand for centuries until the modern era.

In Rome, you could lose your civil rights or voluntarily give up your assets to pay the debt. This punishment carried over into medieval times where Italian cities enacted statutes to deal with the collection and distribution of assets of those who could not pay their debts. The Law Offices of Loomis & Greene near Longmont note that this custom spread throughout Europe, adopted by France and Flanders.

The word bankruptcy comes from the Latin word bancus, which means “a tradesman’s bench” and ruptus which means “broken.” If you were in debt, your workbench could be broken by your creditors. When your workbench is broken, you can’t work. When you can’t work, you can’t pay your bills. When you can’t pay your bills, you have debt, which only mounts. If you couldn’t pay your debts, you were humiliated, sometimes facing the stocks, and imprisoned. There were so many people in this situation that whole prisons evolved, known as debtor prisons, that were full of people whose only crime was that they couldn’t pay their bills. One famous example is Newgate Prison in London.

With such dire consequences, there had to be a different solution. Finally, near the end of the seventeenth century, agreements were beginning to be made between the creditors and the debtors, rather than proceed with criminal charges. However, the stigmatism attached to bankruptcy remained, leaving those who couldn’t pay their debts to be painted as defrauders and criminals. Besides the obvious economic consequences debtors faced, they were often horribly mistreated, ostracized, and sanctioned professionally. The Law Offices of Loomis & Greene in Longmont note that some were even forced to wear clothing that signified this status in society.

English Law

Some of the earliest “bankruptcy” laws were in England, which surprisingly were instituted by the creditors in order to ensure their creditors paid them. In Medieval Times, it was common for debtors to simply skip town and move on to another town without paying, so these laws were meant to try to stop this practice.

Henry VIII passed the first official laws concerning bankruptcy in England in 1542. Those who could not pay their bills were considered criminals and were subject to prison and death. Spain has the distinction of being the first sovereign country to declare bankruptcy, which it did four times between the years of 1557 and 1596 under King Phillip II. The next English law pertaining to bankruptcy, the Bankruptcy Act of 1705, gave the Lord Chancellor power to discharge debts. Still, prevailing attitudes persisted.

Once Australia was discovered in 1770, a common punishment for those in England who couldn’t pay their bills became banishment to Australia. This prevailing attitude was one of deserving punishment if you came upon hard times for most of human history.

It is very hard for us in modern times to understand this mentality, which made its way into the literature of the time, such as David Copperfield, which no doubt helped change the attitudes of people. Bankruptcy was worse than many crimes and considered on par with murder. To be bankrupt would have meant your life was most likely ruined forever, as long as you lived in the same community.

HOW BANKRUPTCY ATTORNEYS CAN HELP YOU IN LONGMONT

Nowadays, bankruptcy laws lean towards the debtor rather than the creditor. It is unthinkable some of the penalties of yesteryears would be applied today.

When you need a helping hand, call The Law Offices of Loomis & Greene near Longmont. We offer bankruptcy representation from start to finish and are here every step of the way for you to get your questions answered. We understand the hardships you have faced and will face as you take this journey in your life. Our bankruptcy attorneys offer compassionate care so that you can put this chapter behind you. We specialize in all types of bankruptcy, including personal bankruptcy, business bankruptcy, Chapter 7 bankruptcy, and Chapter 13 bankruptcy.

In addition to bankruptcy representation, we also can help you with your criminal law needs and your divorce and family law needs. Our exceptional law firm is known throughout Northern Colorado for helping you in all of life’s most important matters. Whether you are facing a DUI traffic charge or your medical bills are mounting, we can help. No matter your circumstances, The Law Offices of Loomis & Greene offers expert legal advice. Reach out today for your free consultation!