History of Bankruptcy – Part 3

Written by: Robert DeMarco
In the Beginning – Code of Hammurabi
The concept of debt relief, in a very general way, is traceable to the Code of Hammurabi (c. 1795 – 1750 B.C.). King Hammurabi united all of Mesopotamia and ruled for forty-three years in Babylon. The Code of Hammurabi is one of the best preserved legal documents and fairly reflects the social structure of Babylon during Hammurabi’s rule. The Code contains two hundred eighty-two laws.
The Code of Hammurabi was harsh; providing for the imprisonment of debtors who are unable to satisfy their obligations. Code of Hammurabi Translated by L.W. King. with Commentary from Charles F. Horne and Claude Hermann Walter Johns, Law 115, Encyclopaedia Britannica (11th ed., 1910) (“If any one have a claim for corn or money upon another and imprison him; if the prisoner die in prison a natural death, the case shall go no further.”); Levinthal, Louis Edward, The Early History of Bankruptcy Law, 66 U. Pa. L. Rev. 223, 230 (1918). The Code was not, however, without mercy. The honest debtor also had the option of selling himself and or family members into slavery, for a period of no more than three years, in an effort to satisfy the obligation. Code of Hammurabi, Law 117 (“If any one fail to meet a claim for debt, and sell himself, his wife, his son, and daughter for money or give them away to forced labor: they shall work for three years in the house of the man who bought them, or the proprietor, and in the fourth year they shall be set free.”); see also, Early History, 237. Yet as harsh as this remedy was, the Roman debtor faired much worse. Early History, 231-232.
DATED: July 3, 2013
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