Bankruptcy is a legal process. This law protects the rights of creditors and insolvent debtors who cannot pay their debts. The term bankruptcy originated in Italy. They did trading from benches in town marketplaces. Creditors broke the branch of a merchant who failed to pay his debts.
In the US all bankruptcy cases are handled through federal courts. Congress passed bankruptcy laws in 1800 and in 1978 passed the reform act.
At the beginning of the twentieth century, the average of bankruptcies was fewer than 20000 per year. Which increase in 2021, including student loans, mortgages, and even credit cards, reached a whopping $14.64 trillion. We can’t just blame the overspending for this situation. According to statistics, over 30 million Americans have already filed for unemployment because of the COVID-19 global pandemic. Now it’s time to learn how to avoid bankruptcy and you can maintain a steady credit score.