History of Bankruptcy:
Bankruptcy is written right into the Constitution (Article I, Section 8, Paragraph 4) and therefore, United States Bankruptcy Law has been around for more than 200+ years.
Virtually every industrialized country in the world has the option of filing bankruptcy as a method of financial relief. The earliest mention of bankruptcy is in the Old Testament, Book of Deuteronomy 15:1-2:
“At the end of every seven years you are to cancel the debts of those who owe you money. This is how it is done. Everyone who has lent money to his neighbor is to cancel the debt: he must not try to collect the money: the Lord himself has declared the debt canceled.”
Bankruptcy is the necessary safety valve in the free market system. Without bankruptcy, people that are over their head financially would give up or become part of the underground. Society will benefit by your bankruptcy, as you will be able to become a productive citizen again and spend your money locally. It is not a crime to not pay your bills, you cannot go to jail for failure to pay your bills.
Bankruptcy is Federal Law of the United State of America.
Found at http://www.bankruptcy-info.com/history.php