The History Of Bankruptcy Law In Illinois

Few bankruptcy laws were drafted before 1898. Those that came after were mostly federal codes, which means that all states had to abide by them. Eventually, states would write their own rules — but most are similar to the rules that were already on the books. If you’re looking to claim bankruptcy and aren’t quite sure where you stand legally, then you need to consult with a bankruptcy lawyer first.

Prior to 1898, the Bankruptcy Act of 1800 was written into law — only to be replaced and repealed several times over the next century. The 1800 law was codified after a significant period of financial decline in the United States. Its framers believed in English laws on bankruptcy, and so the law was modeled after theirs. Everyday citizens didn’t really have access to bankruptcy. You had to be a merchant, banker, or broker in order to make a deal with a creditor.

In the year 1898, the Nelson Act was put into law. This is where most of the modern bankruptcy reforms we still rely on today actually come from. It was pro-business, and provided bankruptcy options to companies that couldn’t make good on their debt. Like the laws that came before, it would be amended by future laws, like the Bankruptcy Act of 1938 and the Bankruptcy Act of 1978.

You might not know what to do if you are going bankrupt, or it might seem like there are no sensible next steps — but that’s not the case. There’s plenty you can do to get your life back on track. It’s worth keeping in mind that once you apply for and claim bankruptcy, you won’t be able to do it again for a number of years. Although you should see it as a “final step” legally speaking, your next steps all involve making several amendments in everyday life.

Financial consultants are fairly important for anyone both before and after a bankruptcy. Figuring out how to make more money and spending less money are the two obvious routes to take, but money managing techniques are real — and they’re important. For example, having cash on hand gives you a tangible thing that you gain and lose. It’s harder to give up. When you use credit or debit cards instead, then money becomes an immaterial thing. Swiping is much easier psychologically, which means you should avoid holding onto credit cards. Cut them up! Or put them in a safety deposit box for when they’re really needed, i.e. emergencies.

Many bankrupt families will also benefit from the realization that there is always a way to spend less. Have you ever heard that saying that Americans spend like they’re temporarily inconvenienced millionaires? Mention Goodwill and many people will scoff, as if that’s beneath them. Meanwhile they’ll still head to McDonalds every other day on the very wrong assumption that it’s cheaper than the produce section at the grocery store. Planning meals and avoiding the store on an empty stomach become more important strategies for saving money.

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