Learn How the United States Established Rights and Protections to Help, Not Hurt You
When the United States Constitution was signed in 1787, it contained the word bankruptcy. The right to get free from debt has been with us nearly as long as the United States has existed.
The language of the Constitution states that Congress has the power to create “uniform Laws on the subject of Bankruptcies throughout the United States.”
Right along with bankruptcy law, Article I Section 8 gives Congress the power to create a Navy, punish pirates, start a post office, and print currency. Bankruptcy is that important.
This section of the Constitution means that the signers intended the federal government to remain in charge of how bankruptcy works. This is largely true today. We now have bankruptcy attorneys who seek to uphold federal bankruptcy laws.
But There’s More to the History Of Bankruptcy
Many aspects of the Constitution have been debated; what did the Founding Fathers originally intend, and is that intention applicable today? At the time of writing, the delegates and signees in Philadelphia unknowingly codified rights for those who struggle with debt.
This clause was drafted because creditors’ rights, not debtors’ rights, were more of a concern. The entire Constitution was written and ratified during a time of economic anxiety, and the delegates at the Pennsylvania State House were worried about the lax debt collection practices that states had grown accustomed to.
Certain states were highly protective of their populace because of an immoral practice in the U.S., one which was viewed as detrimental to the life, liberty, and pursuit of happiness: the debtors’ prison.
From Debtors’ Prison to Bankruptcy Protections: The Evolution Of Rights For Debtors
Debtors’ prison is exactly what it sounds like: jail for those in debt. A concept of “justice” that was carried over from England, the U.S. imprisoned debtors, sometimes for tiny amounts of money. Even one of the signers of both the Declaration of Independence and the Constitution ended up in one.
The sentences given to debtors were immoral by any standard. Debtors were not allowed out until they paid their debts, unlike those who had been given a certain sentence for their crimes.
However, certain states began to view the practice unfavorably and created state laws to protect people in debt.
Justice and progress ensued, and soon a federal law against debtors’ prisons and fairer protections for people in debt emerged. One such protection was a way to get free of debt without having to pay it all: bankruptcy. Remember that the Constitution had given Congress the power to do so. Soon, all three branches of government, along with lower courts and bankruptcy attorneys, began the hard work of helping citizens during the next two centuries, so that debts could be fairly discharged or manageably repaid.
Today, people and businesses can file for bankruptcy with a lawyer to start their financial lives over again. Protections exist, so they don’t have to lose their homes or property. With the help of a bankruptcy lawyer, they can even rebuild their credit scores to a healthy number, while also becoming eligible for future loans, such as a mortgage.
U.S. law protects the right to bankruptcy. Even when we make mistakes or experience hard times, we will never end up flat on our backs, or, worse, in a debtors’ prison.
A Constitutional Right Should Not Be a Source Of Shame
Some who get into trouble with their finances feel ashamed that they may have to file for bankruptcy. They view bankruptcy as the proof that they’ve failed. However, if you look at bankruptcy from the perspective of the Constitution, it is actually an “inalienable right” that you can exercise as an American.
No one should feel ashamed of something that the Founding Fathers and early American patriots fought to establish, so the average person could be protected when misfortune strikes. Hiring a leading lawyer for bankruptcy near you shouldn’t be a source of shame. Instead, bankruptcy is a solution, not a failure – and you have the power to take advantage of it:
- If you earn less than your state’s median income, an attorney can help you file for Chapter 7 bankruptcy to discharge your debt. You’ll also be on the path to a 700+ credit score and eligibility for a mortgage within two years of filing.
- If you earn more than your state’s median income, you can file for Chapter 13 bankruptcy, but pay back your debt on a three-to-five-year payment plan and have your debt discharged after that time.
Continue to learn more about whether bankruptcy is right for you. Explore these educational resources to help you fully understand Chapter 7 and Chapter 13 bankruptcy for your particular situation. Whether you’re struggling with your mortgage, a legal issue, taxes, or you just wanted to better understand if you qualify, these articles can help: