Since the establishment of the United States as an independent country, the laws of debt, lending, and bankruptcy have evolved into what they are today. With factors like social and cultural gravity, economic structures, population size and demographics, political leanings, and even religious ideologies, all of our country’s laws, including the bankruptcy code, have fluctuated and developed accordingly. When it comes to bankruptcy law, there have been several acts in the 20th century alone that led our courts to create what is the current bankruptcy code. If you’re considering filing for business or individual bankruptcy, Behm Law Group, Ltd. can provide legal assistance and guidance with today’s laws and bankruptcy code in Redwood Falls, MN.
Of the many significant changes to bankruptcy law made throughout the 20th century is the Chandler Act, also referred to as the Bankruptcy Act of 1938. In 1938, the U.S. was still struggling with many of the severe economic damages of the Great Depression. It was during this time that business failings and destitute homes were more prevalent than they had ever been before, and to this day are unmatched. Because of this economic strife, our country was seeing more and more cases of financial downfall that could have been prevented and/or remedied with government-sanctioned bankruptcy. Thus, in 1938 the Chandler Act was initiated.
Modern U.S. Bankruptcy Code and The Chandler Act
The basis of the Chandler Act reaches back to the Bankruptcy Act of 1898, which established the primary format of allowing debtors to file bankruptcy and receive protection from creditors. This 1898 law was the first of many groundbreaking bankruptcy-related acts of Congress. As an amendment to the 1898 act, the Chandler Act established a system that allowed voluntary bankruptcy filings for businesses and individuals alike.
Additionally, it was a foundational act for the role of bankruptcy trustees. By eliminating the participation of banks in the filing process, and instead assigning an objective trustee to oversee the case, the Chandler Act was one of the first to create a more accessible, fair bankruptcy option. With a trustee taking on the liquidation and reorganization tasks rather than an investment bank, many antiquated and potentially corruptible processes were dissolved.
Although the Bankruptcy Reform Act of 1978 and the BAPCA of 2005 largely overhauled the bankruptcy laws of the past, the Chandler Act of 1938 will always be a milestone for our court system that marks a moment in history when we strove to move forward and continue to make our system of government one that is balanced and effective for U.S. citizens and businesses alike.
To learn more about how the current bankruptcy code in Redwood Falls, MN will structure the outcome of your case and how you can successfully navigate the waters of the bankruptcy court, contact Behm Law Group, Ltd. at (507) 387-7200 today.