In the U.S., the average person has $38,000 in personal debt not counting home mortgages. Add that to the fact that there’s more than 1.53 million dollars in student loan debt in the U.S. and it’s easy to see why there’s a true debt crisis in this country. Debt can be a crippling burden for those who suffer from the weight it bears. Living from paycheck to paycheck and not being able to make ends meet are all issues facing those with debt.
For individuals and families struggling with debt, bankruptcy is a financial solution that can help to reorganize or eliminate debt, put their lives back in order, and create hope for the future. Although many do not see bankruptcy as a viable option, it has an enduring history in the United States, a history that sheds light on how beneficial it has been.
Early American Bankruptcy Laws
Believe it or not, bankruptcy was a credible financial concept before America entered the Revolutionary War. The first bankruptcy law, however, was not established until the year 1800 and was called The Bankruptcy Act of 1800. According to the Act, individuals could not file bankruptcy on their own. Instead, bankruptcy could only be initiated by creditors. Therefore, all bankruptcies during this time were involuntary.
In 1841 bankruptcy laws were changed due to high accounts of bankruptcy fraud. According to the Bankruptcy Act of 1841, individuals could now file their own bankruptcy as a means of gaining control of their finances. However, critics of the law believed that the Act was too lenient in terms of payments to creditors and the act was repealed.
The years 1867 and 1898 brought about more changes to bankruptcy laws as officials attempted to make the laws more stringent and detailed so all parties involved would benefit. The 1898 law was the first time Congress passed a nationwide bankruptcy act that served a permanent role in the law.
Modern American Bankruptcy Reform
After years of reforming the 1898 Bankruptcy Act, bankruptcy laws in the United States finally underwent a major overhaul in 1978. The most notable change that year was the initiation of the Bankruptcy Code. The code defines the multiple types of bankruptcy including Chapter 7 and Chapter 13 bankruptcy, which are the most common for Americans today.
The most recent change to bankruptcy laws was in 2005 when Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act. It established qualification guidelines for bankruptcy and tests to help those filing determine which chapter to file under.
Educated and Trustworthy Louisiana Bankruptcy Lawyers
Filing bankruptcy is a process that requires due diligence and careful attention to the law. With a trusted and educated bankruptcy lawyer, you can file bankruptcy without having to worry about getting all the small details just right. At E. Orum Young Law, we have more than 35 years of experience and more than 20,000 bankruptcy cases we’ve filed, and you can trust us with your case too.
To talk to an experienced bankruptcy attorney at our office, call 318-450-3192 or fill out our online contact form today. We are ready to help you get back on your feet and on your way to financial freedom.