In 1400 B.C., Moses wrote that debts are to be forgiven in the seventh year.
In the early 1300's, bankruptcy was considered a crime and debtors could be imprisoned until their families paid the debts back.
In 1604, a law was passed in England allowing a debtor's ear to be cut off for failing to pay his debts.
In 1705, bankruptcy reform was enacted in England which provided debtors with two alternatives; participate and cooperate with a structured repayment plan in exchange for a discharge of debts or accept the death penalty.
In 1800, the United States passed its first bankruptcy law which was roughly modeled after the British version but did not have any provision for the death penalty.
In 1898, Congress passed new legislation which is considered to be the foundation of modern bankruptcy law. The new laws provide for voluntary bankruptcies and the discharge of virtually all debts.
In 1938, Congress added the forerunner of today's Chapter 13 which authorizes individuals to pay back just a portion of their debts in accordance with a formulated plan.
In 1978, Congress enacts the Bankruptcy Code which allows more flexibility for companies and individuals to file bankruptcy.
In 1984, the Bankruptcy Reform Act was amended to prevent discharge of many debts.
In 2005, new bankruptcy reform becomes effective.
