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Learn About the History of Chapter 12

Chapter 12 History

Concerning the first Federal statutes in the United States on the subject of bankruptcy, questions specific to benefits for farmers and fishermen were left unanswered, as these professions were barely even addressed by the bankruptcy laws. The Bankruptcy Act of 1898 is generally recognized as the first major comprehensive piece of bankruptcy legislation in America, and was a critical creation on Congress's part because it authorized the creation of the U.S. Bankruptcy Courts.

While its name does not explicitly cite the topic of bankruptcy, questions of whether or not many farms would go under as a result of the Great Depression were firmly responded to in the negative by the Farm Credit Act of 1933. The Act, signed into law by President Franklin D. Roosevelt, offered several forms of relief for farmers in jeopardy of losing the rights to their land, including the extension of emergency loans, temporary low interest rates, and options for mortgage refinancing.

However, as was often the case prior to the 20th and 21st centuries, bankruptcy laws were often short-lived or required renewal to prevent their expiration. The Farm Credit Act, the Frazier-Lemke Act and other legislation of the Depression Era were intentionally passed as impermanent interventions on the part of farmers, fishermen and the like. Thus, continuing with the theme of bankruptcy questions, over the decades and until fairly recently, the biggest uncertainty was that of how long safeguards for farmers would last.

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