History of the Bankruptcy Insolvancy Act

Sometimes in order to invest you need to start over and remove your debts. Bankruptcy is not a new concept in the United States. Although it is viewed as a way for attorneys to charge huge bankruptcy attorney fees this was not always the case. It can be traced back to England where the first laws were initiated to help protect the rights of creditors and not debtors as is now the case. Historically, bankruptcy services or laws allowed the creditors to take all the debaters possessions and either keep or sell them to get back the money that was owed to the creditor. If the debtors possessions did not satisfy the creditor the debtor could be put into prison and thus was the creation of debtor prisons. As society progressed so did the laws regarding bankruptcy.

In the United States a voluntary bankruptcy law was enacted to establish uniform laws on which grounds for voluntary bankruptcy was allowed. In 1841 and 1846 the establishment of laws governing bankruptcy allowed for several changes to be added to and was not just limited to traders as was previously. With the addition  of the chandler act and bankruptcy act of 1898 it continued to move from a creditor centric right to the rights of debtors, realizing that debtors also had rights that need to be protected when it came to people offering credit to people that could not pay for it.

The Bankruptcy laws have continued to be looked at and changed to protect both the creditor and the debtor from abuses. The largest over haul of bankruptcy occurred in another bankruptcy reform act of 1978 where it laded out several titles to repeal unfair laws while strengthening other laws to make sure due just was being severed to both sides.

Bankruptcy law is still evolving since the most recent bankruptcy law changes in 2005 and will continue to change as long as there are people that are loaning money and people seeking loans. The latest version of the 2005 bankruptcy law begins to focus on the education of debtors while trying to secure money paid back to the creditor by way of Chapter 13 bankruptcies.