The Bankruptcy Act of 1898 (Nelson Act, July 1, 1898, chap.) Previous attempts to enact federal bankruptcy laws had lasted, at most, a few years. Bankruptcy laws are rooted in English laws that date back to the 16th century. The first English laws punished debtors who tried to evade their financial responsibilities, usually with imprisonment. Beginning in the 18th century, the change in attitude inspired the development of debt forgiveness.
Courts began to cancel debts as a reward for the debtor's cooperation in trying to reduce them. The public increasingly viewed debtors with pity, in addition to realizing that punishments such as imprisonment were often useless to creditors. Therefore, a law that was initially designed to punish the debtor became a law that protected the debtor while encouraging the resolution of outstanding monetary obligations. The English vision of the 18th century was not reflected in the first bankruptcy laws of the United States; instead, laws based largely on England's previous punitive bankruptcy laws governed the United States.
After the signing of the Declaration of Independence, individual states had their own laws that addressed debtor-creditor disputes, and these laws varied widely. The Bankruptcy Act of 1898 lasted eighty years, thanks in part to numerous amendments, and became the basis for current bankruptcy laws. The 1898 Act established bankruptcy courts and established bankruptcy administrators. Congress replaced this law with the Bankruptcy Reform Act of 1978 (11 U, S, C, A.
One, a reference to a public law number, is a link to the bill as originally approved by Congress, and will take you to the LRC's THOMAS legislative system, or GPO FDSYS site). Like much of American law, the origins of both state debt collection laws and federal bankruptcy law are found in England. To find the origins of corporate reorganization, we must look beyond the early evolution of bankruptcy law and, instead, analyze the evolution of insolvency railroad bankruptcies. Lobbying by creditor groups and a Supreme Court decision that declared certain administrative parts of the Act unconstitutional led to the Bankruptcy and Federal Jurisdiction Amendments Act of 1984. Complaints that the law was expensive to administer, that it was difficult and expensive to travel to federal courts, and the fact that the law provided opportunities for fraud led to its repeal after just two years.
The requirement that the law be temporary was crucial for Democrats because voting in favor of a permanent bankruptcy law would have been a vote in favor of expanding federal power and against the rights of states, a central component of Democratic politics.
Leave Message