History of Bankruptcy in Timeline

Bankruptcy is a legal recourse for individuals or entities overwhelmed by debt. It's a court-ordered process, often initiated by the debtor, providing relief from the obligation to repay some or all outstanding debts to creditors. The specific procedures and outcomes vary by jurisdiction, but the core aim is to offer a fresh financial start to those who qualify under applicable laws. Bankruptcy proceedings are typically overseen by courts and involve an evaluation of assets and liabilities to determine the best course of action.

1966: Bankruptcy Act 1966 in Australia

In 1966, Australia's bankruptcy for individuals is governed by the federal Bankruptcy Act 1966.

1986: Bankruptcy legalized in China

In 1986, the People's Republic of China legalized bankruptcy.

1986: Insolvency Act 1986 in England and Wales

In 1986, the current law in England and Wales derives in large part from the Insolvency Act 1986.

1996: Shift to debtor-friendly regime in Israeli personal bankruptcy law

Since 1996, Israeli personal bankruptcy law has shifted to a relatively debtor-friendly regime.

1998: Previous bankruptcy law in Russia

In 1998, there was a previous bankruptcy law in Russia which was replaced in 2002.

February 1999: Insolvency Law of Credit Institutions

On 25 February 1999, Federal Law No. 40-FZ "On Insolvency (Bankruptcy)" (the "Insolvency Law of Credit Institutions") contains special provisions in relation to the opening of insolvency proceedings in relation to the credit company.

May 2000: UK bankruptcy law changed

In May 2000, the UK bankruptcy law was changed, effective from 29 May 2000. Debtors may now retain occupational pensions while in bankruptcy.

2001: Corporations Act 2001 in Australia

In 2001, the federal Corporations Act 2001 governs company liquidation or administration in Australia.

October 2002: Bankruptcy Act in Russia

On 26 October 2002, Federal Law No. 127-FZ "On Insolvency (Bankruptcy)" was enacted in Russia, replacing the previous law in 1998.

2002: Introduction of Enterprise Act 2002

Following the introduction of the Enterprise Act 2002, bankruptcy in England and Wales now normally lasts no longer than 12 months.

2003: Bankruptcy law passed in Spain

In 2003, Spain passed a bankruptcy law (ley concurs) that provides debt settlement plans, which can result in a debt reduction of up to half the amount or an extension of the payment period of up to five years, but it does not foresee debt discharge.

2004: Record highs in insolvencies in Europe

In 2004, the number of insolvencies reached record highs in many European countries, including France, Austria, and Greece.

2006: Debt arrangement procedure introduced in Sweden

In 2006, a debt arrangement procedure (Swedish: skuldsanering) was introduced in Sweden, allowing deeply indebted individuals to obtain a payment plan and have remaining debts cancelled after five years.

2006: Personal insolvency filings in Canada

In 2006, there were 98,450 personal insolvency filings in Canada, with 79,218 bankruptcies and 19,232 consumer proposals.

2007: Revised bankruptcy law enacted in China

In 2007, a revised bankruptcy law that was more expansive and complete was enacted in the People's Republic of China.

2008: European Commission Communication

In 2008, a European Commission Communication highlighted a faster start-up programme for people affected by bankruptcy operating in Denmark and a scheme to support Belgian business owners and self-employed persons as good practice examples.

2009: Debt advice stressed

In 2009, it was stressed that debt advice, a supervised rehabilitation period, financial education and social help to find sources of income and to improve the management of household expenditures must be equally provided during this period of rehabilitation.

2009: Introduction of Debt Relief Order

Since 2009, the introduction of the Debt Relief Order has resulted in a dramatic fall in bankruptcies in England and Wales.

2010: Debt advice stressed

In 2010, it was stressed that debt advice, a supervised rehabilitation period, financial education and social help to find sources of income and to improve the management of household expenditures must be equally provided during this period of rehabilitation.

2010: Reduction of insolvent estates in Canada

In 2011, there was a reduction of 8.9% from 2010 of insolvent estates in Canada.

2011: Civil Law Act reforms Irish bankruptcy law

In 2011, Part 7 of the Civil Law (Miscellaneous Provisions) Act 2011 began the process of reforming Irish bankruptcy law.

2011: Canada reports insolvent estates

In 2011, the Superintendent of Bankruptcy reported that trustees in Canada filed 127,774 insolvent estates, the vast majority being consumer estates, with 122,999 estates. Commercial estates filed by Canadian trustees in 2011 were 4,775 estates.

2013: Bankruptcy law revamp in Europe

In 2013, a number of European countries, such as France, Germany, Spain and Italy, began to revamp their bankruptcy laws, modelling these new laws on Chapter 11 of the U.S. Bankruptcy Code.