The history of bankruptcy in the United States goes all the way back to the late 1700’s when our founding fathers were drafting the Constitution. Article 1, Section 8 of the Constitution grants Congress the power to establish federal laws on the subject of bankruptcy.
The first federal law on bankruptcy was way back in the year 1800 and these laws have been changed many, many times since. The modern law on bankruptcy really started in 1978 and created what we now refer to as the “Bankruptcy Code.”
The Bankruptcy Code has been amended several times with the most recent overhaul taking place in 2005 and that’s the Code that we operate in today.