Bankruptcy – History, Developments and Recent forms

Bankruptcy … as in the recent times wasn’t the same always. Its origin was an outcome of the necessity of the creditors to recover the money from the merchants who failed to return the amount. Prior to 1542, this wasn’t a legal proceeding though, but was a very effective remedy for the creditors to recover their money by seizing all of the assets of the debtor. Here not the debtor not only had to lose some part or all of his/her property … he/she was also subjected to imprisonment, losing all his freedom. And so as to obtain the release of the debtors, their families had to pay the debts. In short the earlier laws had all the good in the kitty for the creditor only. However in due course of time, considering the socio-economic status and life of any individual proper laws were made governing the bankruptcy proceeding, making it more legal and official procedure.
The coinage of the word ‘bankruptcy’ occurred from the ancient Latin language and is formed o two parts … ‘bancus’ meaning a bench or table and ‘ruptus’ meaning broken. Here the bech referred to a bank. The evidences of Bankruptcy are also found in the East Asia. According to many studies Genghis Khan contained a provision in his kingdom that awarded death penalty for anyone who became bankrupt twice or thrice. Bankruptcy in West as in ancient Greece did not exist. Here a person unable to payback his debts had to surrender himself, his entire household, whether wife, children or servants and all of them were forced into "debt slavery" and the creditor was used to cover his losses through their physical labor. Sacrificing limbs or body parts/limbs etc was also one such form.
The present format of bankruptcy and the laws associated with it originated in England. Bankruptcy as a subject got specific recognition upon the adoption of the United States Constitution in 1789. Voluntary bankruptcy at that time was unknown and was established as an institution by the Acts of 1841, 1867 etc. It was then followed by the Bankruptcy Act, Chandler Act and many other subsequent acts. As a result of all of these acts the scope of voluntary access to the bankruptcy system broadened in due course of time to such an extent that today the voluntary petitions are more attractive to the debtors. Many other elements like Bankruptcy Trustees, credit counseling etc are now made available to the debtors.
Despite all the advantages that it may have, Bankruptcy even in the modern times have has many severe disadvantages. A bankruptcy filing is a black mark on your credit history and makes obtaining loans, mortgages, and credit cards difficult in future. Therefore the alternatives to manage the bankruptcy should be considered very carefully. A negotiation for an alternative/easy payment plan with a creditor is one such very good option that can be worked out. Help from an attorney or credit counselor specialized in credit negotiations may be opted for the same.

Declaring bankruptcy depends on the banks balance. There are many bankruptcy happening in new west.