Can you guess what the penalty was before the 1800s for debtors who are unable to meet their liabilities as they become due? Imprisonment. By the turn of the century, the first set of bankruptcy laws were enacted; this was in response to the land-related speculation. However, these laws were repealed within three years.
During the 1800s, bankruptcy laws served to protect the interests of the creditors, giving them the legal mechanism to get the money owed to them by their debtors.
By 1841, the second batch of bankruptcy legislation was passed. These laws were enacted after the panic of 1837. However, like its predecessor, they were repealed. However, another set of laws were passed in 1867 in response to the economic distress caused by the war. This legislation was the first to include corporations in its coverage.
To put companies struggling with economic distress under rehabilitation and reorganization, the Bankruptcy Act of 1898 was passed. This marked a development where the interests of the debtors are protected and sought to be preserved.
The Great Depression affected most Americans. Many businesses were closing down while some were struggling to keep afloat. To help honest debtors get back on their feet and get a fresh start, bankruptcy laws were enacted in 1933. By 1938, the Bankruptcy Act was amending, paving the way for an additional provision that gave customers priority over creditors in filing a claim against an insolvent business.
As new developments emerged and the business landscape changed dramatically since then, the Securities Investor Protection Act was enacted in 1970. Its purpose was to increase the accountability of brokers to protect investors, restoring their confidence as bankruptcy law abuses were becoming rampant.
By 1978, the Bankruptcy Reform Act came into effect, making the bankruptcy process simpler for both individuals and corporate entities. Two years later, the Bankruptcy Tax Act was passed, clarifying ambiguities relating to taxes under former bankruptcy jurisprudence.
In 1984, the Bankruptcy Amendment Act restricted some of the powers of the bankruptcy courts as well as limiting the rights of companies to end labor contracts. Two years later, Chapter 12 took effect, giving family farmers the right to keep their farm while under bankruptcy protection.
Also during this time, filing for bankruptcy became a common option for many companies. Corporations like Continental Airlines, Greyhound, and Pan Am were just some of the many corporations that sought bankruptcy protection.
In 1994, the Bankruptcy Reform Act underwent changes that resulted in expedited proceedings, which encouraged many individuals to seek Chapter 13 protection.
The latest development in bankruptcy legislation happened in 2005 when the Bankruptcy Abuse Prevention and Consumer Protection Act took effect. Under this law, debtors receiving below the median income are no longer required to pay their debts.
If you want to learn about bankruptcy laws, check out this website. It also provides a link to the American Bar Association’s Legal Help website if you are looking for a bankruptcy attorney from various states: http://www.uscourts.gov/services-forms/bankruptcy
Trustworthy and Reliable Utah Bankruptcy Attorneys
Are you undergoing difficulties in paying your debts as they become due and demandable? Would you like to seek protection under bankruptcy laws to preserve and protect your assets from being taken by your creditors? Perhaps you might want to speak with a Utah bankruptcy attorney.
The bankruptcy process is a complex and tedious one. There is plenty of paperwork to do. There are repayment and liquidation plans to be made. There are details to be worked out as well.
It’s not easy. But you can make it easy for yourself. How? Speak with a bankruptcy attorney. If you need to talk to Utah bankruptcy attorney, get in touch with Justin M. Myers Attorney-at-Law, LLC.
To schedule a one-on-one consultation, please call us at (801) 505-9679.