Content part: Bankruptcy means that a physical person or a company is unable to pay its creditors, so that person or company, the debtor, must develop a plan to resolve his payments to the creditors, by dividing his assets. This division is commonly made by the creditors or the bank which offered the credit to the debtor. The division of the assets permits the creditors to obtain their money back in a legal way. The divison can be made in the form of a public licitation or by a simple division. In some cases it is allowed for the debtor to stay in business, but he is obliged to use his income and revenue to resolve his debts, becoming debt free.

The history of bankruptcy goes way back in the ancient times, to the Roman Empire, where in 450 BC the Law of the Twelve Tables offered some good methods for those unfortunate but honest persons who had debt problems. In the first place, the debtor had a period of grace, a period of 30 days in which somebody could pay his debts for him.  If that did not happen, three days later the creditors could sell the debtor as a slave with his children or wife or he could be imprisoned, as the creditors wished. In ancient Greece this method did not exist, if a citizen with full rights had financial debts, his entire household was forced to complete “debt slavery,” until the creditors managed to gain back their loss through the physical labor of the debtor’s household.

The first English bankruptcy law appeared in 1570, during the reign oh Henry VIII. This law was passed because debtors were imprisoned and bankruptcy became a national problem, this law declared that the debtors who did not cooperate could be executed! There were many provisions regarding the law, saying that bankruptcy is not something you do, but is something that you are, being a national problem. The early Americans followed the English law of bankruptcy.  In 1790 there was a proposal regarding the general law of bankruptcy.  In 1800 it finally was accepted, creating a legally controlled relation between the debtor and creditor.

Today bankruptcy is becoming a large problem, because in this financial crisis, more and more persons and corporations are dealing with it.  But in the present each country offers solid debt consolidation help that protects the unfortunates that have to deal with these problems.