Home stead protection under the laws of federal bankruptcy. Individual state homestead exemptions in bankruptcy


Bankruptcy Laws Then and Now

Early in the history of our country, bankruptcy laws enacted violent results that involved punitive efforts against debtors. The term bankruptcy itself comes from a medieval practice that occurred in city states of Italy that involved breaking a merchant’s benches if they had left prior to paying creditors. Additionally, in early British law, those people who were bankrupt were hung at the gallows at times. Don’t worry, when hiring a bankruptcy lawyer in today’s day and age, the same fate does not await you.

In today’s society, and certainly here in the United States of America, federal bankruptcy law is much more careful as well as more lenient on debtors who have had accounts become delinquent or which ultimately go unpaid. This favorable protection offered by bankruptcy laws allows debtors to become free of debt and able to move forward.

A relative increase of filings began when the Bankruptcy Reform Act was enacted in 1978. This congressional act was a revision and major overhaul Bankruptcy Reform Act of 1892 and offers us the basis of current bankruptcy law. The bankruptcy code recently in 2005 also underwent extensive revision, as the bankruptcy abuse prevention and Consumer protection Act (BAPCPA) was passed. Most bankruptcy amendments went into effect on October 17 in the year 2005.

There is a gut wrenching feeling when a client comes home to find a notice on the door of a lawsuit. There is another sinking feeling in your stomach if you get called constantly by a process server who needs to deliver the papers personally for a lawsuit. Then there is a horrible feeling when a notice comes in email or simply by seeing your paycheck garnished. Then there is another double whammy when a bank account is levied. But bankruptcy is a powerful tool to combat each of these events. If qualifying for chapter 7, you could be allowed to eliminate such debts that cause these types of lawsuits and collection activities.