How Debtors Were Treated Before Bankruptcy Laws

The Wall Street Journal had an interesting story on January 30, 2006, about the history of bankruptcy laws in the United States. Interesting facts about bankruptcy included the following:

In England before the revolutionary war debtors were imprisoned for failure to pay creditor, and the debtors were made responsible for the cost of their imprisonment. Imprisonment could last a lifetime.

There were debtors prison in America after the Revolutionary War.

Some American colonies bound debtors in service to their creditors for up to seven years as repayment of debt.

Robert Morris, a signer of the Declaration of Independence, was imprisoned in Philadelphia in 1798 for failure to pay debts.

Congress passed the first bankruptcy law in 1800, but then repealed it three years later.

York did not abolish debtors prisons until 1831, and Pennsylvania kept debtors prisons open until 1842.