A Brief History of Bankruptcy

The concept of bankruptcy has been around for centuries, practiced in different societies with varying approaches to handling debtors and creditors. As long as people have been lending money, there have existed different methods of dealing with a debtor’s inability to repay debts.

Bankruptcy in the Bible

The bible references the concept of debt forgiveness in Hebrew society in the book of Deuteronomy. According to Hebrew law, all creditors were required to forgive debts during the “sabbatic year” which occurred every seven years.

Bankruptcy in Ancient Greece

In Ancient Greece, there was no such thing as debt forgiveness. When someone could not repay their debts, they and their family would be forced into debt slavery, working for their creditor. In some cases, there was a limit of five years on debt slavery.

Bankruptcy in Ancient Rome

Ancient Roman law allowed for bankruptcy, but at a high price for the debtor. If someone was unable to pay their debt, they would either voluntarily or involuntarily give up all their property and suffer a loss of civil rights.

Bankruptcy in the Middle Ages

During the middle ages, bankruptcy laws underwent revisions as more aspects of a commercial society began to develop. These laws were still quite harsh but allowed debtors to escape their debt in exchange for a liquidation of their assets to be divided between creditors

Bankruptcy in America

Bankruptcy in early America was influenced largely by English bankruptcy laws. While the founders were resistant to the idea of debt forgiveness, they realized the need to be prepared for citizens to default on their debts. Modern bankruptcy in America is much less harsh than forms of bankruptcy throughout history and is aimed at helping debtors reorganize and recover.

Contact Us

If you are considering bankruptcy, the West Palm Beach bankruptcy attorneys of Eric N. Klein & Associates, P.A., can help you. Filing for bankruptcy can be an overwhelming process without experienced assistance on your side, so contact us today at 561-353-2800.