History of U.S. Bankruptcy
This is a series on Bankruptcy in the United States: Part 1 of 3 with a look at how bankruptcy began and how bankruptcy is viewed today. Usually, our clients are very concerned with their image to friends, family and the public.
This is a look at how bankruptcy has changed over time and why some laws have been incepted to provide financial and economic protection and support to individuals and businesses.
Lanigan and Lanigan has provided bankruptcy support to businesses and individuals in Florida since 1976. There’s not a problem, issue or question that a client hasn’t asked. And every question is valid because before you consider filing bankruptcy, you should get answers relevant to you.
Every case is different and your friend, neighbor or co-workers shouldn’t influence your decision to file or not to file. Usually, it’s a very personal financial choice and a legal option that was created to provide debt relief and economic restructuring and counsel to those so that past challenges aren’t repeated.
Can Your Reputation Survive Bankruptcy?
Clients always ask: will bankruptcy affect my ability to get credit, buy a car or a house?
Before answering that question, look at the issues. Bankruptcy can become an option for anyone that incurred debt that seems impossible to repay. Can your reputation survive bankruptcy? Take a page from the book of U.S. masters of industry who used bankruptcy to rebuild empires.
Here are several leaders who filed bankruptcy:
- Abraham Lincoln
- Henry Ford
- President William McKinley
- President Ulysses S. Grant
- Walt Disney
- Thomas Jefferson
- Charles Goodyear
- (Artist) Rembrandt
- Wolfgang Amadeus Mozart
- Milton Hershey
- Stan Lee (Spiderman creator)
- Henry Heinz
- Francis Ford Coppola
The History of Bankruptcy in the World
Bankruptcy and the elimination and forgiveness of debts goes as far back in world history as does money and the accumulation of wealth. However, in ancient societies in Greece, up through Europe’s establishment of banks in France, Italy, Germany and Spain, bankruptcy was viewed negatively.
Bankruptcy, came from the word bank and bench referring to the table where a banker placed money. When the money was lost, squandered, or stolen, the bench was deemed broken.
Negative Connotations Came From Non-U.S. Bankruptcy History
Bankruptcy was also a term reserved and associated solely with merchants vs. individuals. Merchants who lost their money for whatever reason were not dealt with kindly.
Merchants who became bankrupt would not only experience loss of wealth, property and assets but could be placed in a debtors prison. In some societies, bankruptcy meant a turn of fate that could include a life of indentured servitude, or even slavery to those owed money, land, or goods.
Bankruptcy used to mean that those in business had failed and were doomed to a life that could include total loss of rights, assets, and future business opportunities.