Picture Showing Debt Prison

Time to File Bankruptcy?

What is Your Debtor’s Prison?

So When is it Time to File Bankruptcy?

I pose that question to you the reader, after hearing on almost a daily basis what a living “hell”, surviving with debt can be. Is it? From sleepless nights, and threatening creditors’ calls, to depression, divorce, stress, and feelings of worthlessness, living in debt affects each of us differently. Imagine a concept that is available for some of those in the worst of positions, might actually put those back on a productive track again. Now imagine that sort of option not only responsible and ethical, but actually sponsored by the government, legal, and yes, moral. Banca Ratta is the Italian phrase from which our idea of Bankruptcy comes. It means “broken table”. In medieval days, when a merchant failed to pay his debts, the creditors would “break their stand, or table. The merchant was then out of business. “Start over and go do something else!” “Do-Over!”

Time to File Bankruptcy – The Why?

The notion of debt forgiveness also has roots from the Old Testament, “Every seven years, you are to cancel the debts of those who owe you money. This is how it is done. Everyone who has lent money to his neighbor is to cancel the debt and not try to collect. The Lord has declared the debt canceled” (Deuteronomy 15:1-2) Imagine if humanity lived like that today! “What 30-year fixed rate?”

What Debtor’s Prison are you in?

Did you know that one of the signers of the Declaration of Independence spent several years in a debtors’ prison? That’s right, Robert Morris, spent three years in debtors’ prison, and six years in the U.S. Senate. Click Here for more information about Robert Morris. The idea of a debtors’ prison, while now only a distant memory, was in actual practice not that long ago. Originally in ancient Rome, a debtor prison was more akin to slavery wherein the debtor became the servant of the creditor (still sounds familiar every time I pay my credit card bill). In the U.K, debtor’s prisons were used up until 1869, when the Debtors Act abolished imprisonment for debt. Even after that, however, debtors who had the means to pay their debt, but did not do so, could still be incarcerated for up to six weeks. Today, one has to commit a lot of crimes before spending six weeks in the clink. The great author Charles Dickens spent time in the “county bucket” for debt. Too bad for his creditors they didn’t take future royalties on that silly Christmas book he kept nagging about huh?

Knowing when it’s time to file bankruptcy is not as easy as it sounds.  By all means, one should avoid it if possible.  When it’s needed, however, one should do it, and get that fresh start they seek.  Our Bankruptcy system today is the grand result of Americans climbing out of this historical tug of war between the competing sister interests of debtors and creditors. While today, there are no such “debtor’s prisons” or enslaved debtors, the Bankruptcy Code, or BAPCPA as it is called, protects against such notions and offers not only a fresh start but a legal way to alter the rights of those to whom you owe money. So, to answer the question: What is Bankruptcy? Today, Bankruptcy is a collection of evolving rights, afforded by our elected Congress, based upon hundreds of years of improvements, with divine inspiration, and the failed attempted alternatives, of providing debtors with a legal, ethical, and moral way, of altering the rights of their creditors, so that they, “the debtors” can be productive.

About the author 

Guss Markwell

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