What is Bankruptcy?

The following is a brief discussion of Bankruptcy.

The word bankrupt does not have a clear origin. It has been said to come from the "breaking of an Italian money changer’s bench" or  even from the obscurity of Latin origins. However, it is a used today as an English word and can be traced back no further than the middle of the eighteen century. Whereas the actual english statute which scholars and lawyers contend is the origin of modern bankruptcy laws is traceable to the time of Queen Elizabeth I, about 200 years earlier. Considering its obscure origins, it is no surprise that most people have no clear understanding of its function or purposes in modern society.

The Constitution of the United States gives to Congress the power to make uniform laws on the subject of bankruptcy. Congress has exercised this power on a number of occasions, but only with great difficulty. The reason for this is two-fold. First, bankruptcy is sometimes called counter intuitive, which means what you think should happen rarely does. Like Alice behind the looking glass in the Lewis Carroll story, we find ourselves in a place where right is wrong and left is right. So during the early history of our nation the party that supported brought bankruptcy jurisdiction to the party we now call Republican and those for No or Limited laws were the Republicans now called Democrats. Famous presidents of our time such as Lincoln was a Bankruptcy Attorney in Illinois before he became president and Thomas Jefferson signed a bill repealing the first bankruptcy statute in 1801 just after he took office.

Most recently the Republican party (decended from President Lincoln) made the Bankruptcy Abuse and Consumer Protection Act of 2005 which was designed to limit your right to a bankruptcy discharge. In fact, the bill has several sections where it depicts the sense of Congress is to limit an individual’s right to file for bankruptcy. But remember we are on that side of the looking glass where right is often wrong.  BAPCPA(Bap-See-Pa) actually increased the bankruptcy filings several fold before its effective date of October 17, 2005. After that date the BAPCPA restrictions were intended to make a person’s bankruptcy filing very difficult, but they proved either ineffective or actually made filing a bankruptcy easier for some individuals to file for bankruptcy protection. 

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If you have more questions about bankruptcy law and would like to speak with an experienced bankruptcy attorney, call our law office today to contact our bankruptcy law firm.