The Bankruptcy Act of 1800

Established on April 4, 1800, the Bankruptcy Act was the first bankruptcy law on the books in the United States. Prior to this, no claims of insolvency were possible for United States citizens.

History

Bankruptcy law did not begin in the United States, but in 1789 the Constitution granted Congress the right to enact bankruptcy law. Eleven years later, Congress passed the first American Bankruptcy Act.

Act of 1800

Though bankruptcy became possible through the Bankruptcy Act of 1800, the act was severely limited. According to the Economic History Association, the law allowed only the involuntary bankruptcy of businessmen and traders.

Repeal

In 1803, Congress repealed the short-lived Bankruptcy Act of 1800. Following the contentious success and ultimate failure of the act, Congress did not pass another bankruptcy law until 1814.

References

• EH: Bankruptcy Law in the United States
• Abate Lawyer: A Short History of American Bankruptcy Law in the 1800's
• Chest of Books: The History and Purpose of Bankruptcy Legislation, Part 2

Resources

• United States Courts: Bankruptcy Basics
• The Free Dictionary: Bankruptcy