Bankruptcy

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Bankruptcy help and information for beginners.....

When the ancient Egyptians hammered metal shards into rings to use as currency in 2500 B.C., it's doubtful they were thinking of the future waves of humans who would have trouble paying their bills. In ancient Rome, when a tradesman found himself in debt and could not pay, his creditors were allowed to smash his trading counter. The situation was called a 'bancus ruptus,' Latin for 'broken bench.' And today, we call it bankruptcy.

Predictably, anyone filing bankruptcy today has a million questions bumping through his or her brain - how do I begin to file bankruptcy? I've heard of Chapter 7, what is it and can I apply? What's the deal with lawyers, forms and court costs? Will I ever be able to use a credit card again? If you're looking here, you'll see information to all these questions and more.

Don't worry, though; bankruptcy has evolved quite a bit from its rather messy origins.

If you went bankrupt in 17th century England, you were considered a criminal and often handed a death sentence or even worse, incarceration in debtors' prison. Colonial America took its cue from England and locked debtors into the stocks or jail.

Is there life after bankruptcy?

Twenty-first century law considers the matter of bankruptcy one to be fought out in court, with debtors and creditors bearing arms of paperwork and red tape. And while bankruptcy may be a financial and mental nightmare, your creditors are not allowed to harm you and that is certainly a step up.

One who is bankrupt is defined by Merriam-Webster's Dictionary as "a person judicially declared subject to having his estate administered under the bankrupt laws for the benefit of his creditors." In other words, bankruptcy tries to satisfy both the creditor and the debtor by paying the bills due to one and clearing the debt of the other.

The largest bankruptcy case in American history was the 2002 filing by WorldCom. WorldCom found itself in financial trouble when accounting fraud misreported almost $12 billion in assets, and filed for Chapter 11 bankruptcy after a long investigation. The situation, a direct result of shady accounting procedures, sparked an outcry against corporate fraud in the United States.