Sacramento Bankruptcy: The History of Bankruptcy Law
Bankruptcy History
The bankruptcy laws of the United States was founded under our civil code. Article 1, Section 8 of the United States Constitution authorizes Congress the exclusive power to “establish uniform laws on the subject of bankruptcies throughout the United States” which the modern bankruptcy law was based on.Through either liquidation or reorganization, the bankruptcy law provides a chance for debtors to start anew. In 1800, due to the harsh economic conditions in America, the first Bankruptcy Laws were established. As the economic conditions changed throughout 19th and 20th century, bankruptcy laws were passed and/or repealed to keep up with the times.
Congress passed The Bankruptcy Reform Act in 1978 which provided an easier way for individuals or businesses to dissolve their debts and/or to reorganize. The Bankruptcy Law is instrumental to America’s economic prosperity, because it provides a chance for previously indebted consumers regain the ability to spend again. In turn, it stimulates the economy. When an economy is doing well, people spend more and companies grow bigger. When an economy is not doing well, people spend less and companies start to downsize. However, without enough saving and spending power, the country’s economy would suffer more. As a result, more people will lose their jobs. Essentially, The Bankruptcy Law provides people a chance to cut their losses and spend again. Call Sagaria Law for a free bankruptcy consultation with a knowledgeable attorney in Sacramento.
