Every society throughout history has evolved some method of dealing with debtors unable to repay what they owed. Wars, illness, death and taxes have left people with reduced or no incomes since the earliest civilizations. Ancient Greece had a simple solution; the entire family would be enslaved for five years or until the debt was paid off. The Old Testament declared that debts owed to other members of the community would be forgiven every 7 years.
Many centuries later, Genghis Khan was not as lenient; anyone who declared bankruptcy three times was sentenced to death. Fortunately for him, King Philip II of Spain wasn’t a citizen of Genghis Khan’s empire. During the mid-1500s, King Philip declared Spain bankrupt four times. England passed a series of bankruptcy laws, which generally considered bankruptcy a crime and the debtor an offender. Debtors were sent to jail or bonded to their creditor, in most cases.
The United States took their lead from English law, treating bankrupts as semi-criminals, until the 1800s. A series of laws were passed throughout the 1800s that gradually evolved toward a system which would attempt to find a way for a debtor to repay his debts. In 1938, the Chandler Act made it easier for individuals to voluntarily file for bankruptcy protection. The Bankruptcy Code we are familiar with today came into being as the Bankruptcy Reform Act of 1978. The latest revision to the Bankruptcy Code was made in 2005. One of the changes is that it became more difficult for some people to file for Chapter 7; some of those people could file under Chapter 13 instead.
Even with the changes, more people still file under Chapter 7. This is designed to allow debtors to wipe out most of their debts and start fresh. In theory, the debtor’s property will be sold to repay some of the debt, but in practice most people retain all of their property.
Sean Koplow P.A. is a Florida law firm that focuses on assisting those who need bankruptcy relief. For over 15 years, Sean Koplow has been devoting himself to consumer law, as he felt that this was where he could make the biggest difference in people’s lives. Anyone who feels that their financial situation is desperate should contact this Chapter 7 Bankruptcy Lawyer in Royal Palm Beach. He will be able to explain all of the available options.
