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Bankruptcy’s History
Bankruptcy was considered a creditors remedy in the beginning. The creditors could seize the property of the trader who was behind in payments and have them thrown in jail until his debts were paid. These jails were modeled after the workhouse debtor’s prison in London from the late 1600s to the early 1800s. The debtor would work off a debt, or the family would have to come up with the money to pay the debt and get the person out of jail. In 1833 in the United States, federal law banned all debtor’s prisons. Several states also prohibited the practice of locking up people behind in their debt.
Bankruptcy Today
Today bankruptcy is a tool that helps the debtor get financial relief. It also helps creditors by providing an environment for the settlement of debtor’s affairs and the distribution of any seized and sold assets from the bankruptcy estate.
Flexible Rules
It is almost impossible to create laws that will benefit both the debtors and the creditors every time. Creditors and debtors have two different agendas when it comes to bankruptcy. The bankruptcy rules were written to be flexible enough to allow for all parties’ interests. We may not have debtors’ prison anymore, but you may feel trapped if you are in debt and struggling to make your payments.
Contact a Citrus Heights bankruptcy attorney today to find out what your options are to get financial relief.
Liviakis Law Firm
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