The Bankruptcy Act of 1898 brought us the modern era of liberal debtor treatment. One commentator of the time suggested Congress went too far in favoring debtors. The Bible contains provisions for a forgiveness of debts by creditors and return of land to the original owners. This jubilee year occurred every fifty years. While it is often assumed that today's voluntary bankruptcy and the biblical jubilee are similar, they are not.
Voluntary bankruptcy is for many, an avoidance of their rightful obligations.
The biblical jubilee was a voluntary forgiveness of debts by creditors. In 1938, Congress overhauled the bankruptcy law and created the Chapter 13 plan. Another major overhaul took place in 1978. One feature of the act was the hope that more people would use the Chapter 13 provisions and repay their creditors over a multi-year period. Congress did consider making Chapter 13 mandatory for all filers but later allowed it to be voluntary.