{"id":286960,"date":"2024-05-13T11:46:00","date_gmt":"2024-05-13T16:46:00","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/what-is-bankruptcy\/bankruptcy-overview.html"},"modified":"2024-05-13T11:46:00","modified_gmt":"2024-05-13T16:46:00","slug":"bankruptcy-overview","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/what-is-bankruptcy\/bankruptcy-overview.html","title":{"rendered":"Bankruptcy: Overview and History"},"content":{"rendered":"\n
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Bankruptcy: Overview and History<\/h1>\n
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\n By FindLaw Staff<\/a> | Legally reviewed by FindLaw Staff<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Understanding bankruptcy can be a strategic move for long-term financial planning. Though it takes time, the bankruptcy process will generally resolve your debt crisis and help you start over financially. <\/p>\n\n <\/div>\n\n

Understanding bankruptcy can be a strategic move for long-term financial planning. Though it takes time, the bankruptcy process will generally resolve your debt crisis and help you start over financially. This can help you achieve your financial goals and achieve stability. Financial setbacks may happen from time to time, but what matters most is how we navigate and learn from them.<\/p>\r\n

Read on for an overview of bankruptcy filings and their benefits.<\/p>\r\n

History of Bankruptcy in the United States<\/h2>\r\n

Several early attempts at creating universal bankruptcy laws in the U.S. were amended and repealed until the late 19th century.<\/p>\r\n

After much disagreement, Congress passed the Bankruptcy Act of 1898<\/a>, also known as the Nelson Act. Creditors lobbied for the Nelson Act to have uniform federal rules for bankruptcy. It largely set the stage for bankruptcy as we know it today. The 1938 Chandler Act <\/a>significantly amended the Nelson Act.<\/p>\r\n

Then, in 1978, Congress created the Bankruptcy Code<\/a>. This superseded the Bankruptcy Act that came before the Code.<\/p>\r\n

The Code provides several legal ways to eliminate debts through bankruptcy. These legal approaches are listed under the Code’s chapters and referred to by their chapter number (such as "Chapter 7 bankruptcy<\/a>"). They can be complicated. Many people find a bankruptcy attorney useful to avoid mistakes, pick the right plan for their debt, and avoid trouble with the courts.<\/p>\r\n

The Code has been amended numerous times since being passed. It governs all U.S. bankruptcy cases.<\/p>\r\n

The Federal Rules of Bankruptcy Procedure<\/a>, created by the U.S. Supreme Court, governs the bankruptcy process. Each bankruptcy court also has its own local rules.<\/p>\r\n

The Six Forms of Bankruptcy<\/h2>\r\n

There are six different types of bankruptcy in the U.S. Each form is designed for a specific purpose and has its own benefits and consequences.<\/p>\r\n