Creditors around the country probably still secretly wish that Debtor’s Prison still existed so that they could send all the people that do not pay their bills there. Thankfully, the founding fathers had the foresight to do away with such an antiquated notion back when the country was formed and even provide the foundation for the bankruptcy laws that we now have today.
Little do most people know but the founding fathers were not the best at managing their own finances as they were in managing a war for independence. After all, these people did dump thousands upon thousands of dollars in tea into Boston Harbor! Most people are not aware, but the third president of the United States, Thomas Jefferson, was on the verge of bankruptcy for many years.
Luckily our founding fathers had the understanding that financial turmoil could strike any American, usually honest people that made a few too many mistakes or fell on hard times that would have trouble making ends meet and fulfilling their financial obligations. The first law allowing for people to wipe their debts clean was passed in 1800, but the power of business was evident even then and the law was repealed three short years after it was enacted. States tried to follow suit by enacting their own bankruptcy laws, but the Supreme Court quickly put a stop to this exercise.
The first federal law to pass that helped debtors came about in 1833. However, it was not until 1841 that bankruptcy laws became more of a remedy for debtors than creditors. Much like the law in 1800 though, this one was abolished three short years later as well. Another effort lasted a few years longer following the end of the Civil War with the passage of the Bankruptcy Act of 1867; eleven years later business interests once again prevailed as the law was done away with.
The underlying rationale for the repeal of each bankruptcy law was that it should be up to the creditor and/or the court if someone should be able to declare bankruptcy and wipe out their financial obligations. It was not until the late 1890s that the idea that honest people should be allowed a way out from the financial hole of too much debt without the creditors/ courts giving the okay. This unconditional discharge finally became law with the passage of the Bankruptcy Act of 1898.
Creditors undoubtedly still try to get this law overturned. It worked at other times in history so why not? However, in a country founded on the concept of new beginnings the concept of being allowed to escape persecution of a financial nature appears to have become an inherent right.
So when you are pondering the decision to file for bankruptcy keep this in mind: it took nearly a hundred years for that right to be secured; it is yours- use it. Also, if it was good enough for Thomas Jefferson than it is good enough for you too!
If you are in North Carolina, talk to the experienced bankruptcy attorneys at the Law Offices of John T. Orcutt today to discuss how bankruptcy can help you save your family home from foreclosure, decrease your auto payments, and get rid of your burdensome credit card debt once and for all. Call +1-919-646-2654 today to set up your free initial consultation. Convenient offices in Raleigh, Durham, Fayetteville and Wilson.