Bankruptcy Laws Followed American Panics

America kept passing bankruptcy laws after financial disasters, only to throw them out again. Congress enacted the first four in 1800, 1841, 1867, and 1898 after the Panic of 1797, the Panic of 1837, the Civil War depression, and the Panic of 1893. Creditors helped kill the 1841 and 1867 laws by complaining that debtors could wipe out too much debt. The 1898 law was the first to stick, remaining in force with amendments until 1978.

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