Julius Caesar was emperor of Rome for a scant five months, but in that short time he changed the course of financial history. A lifelong debtor himself, Julius Caesar gave the world bankruptcy laws. The world's earliest bankruptcy laws were discovered on the obelisk containing Hammurabi's code, but Caesar's laws generally are considered the root of modern bankruptcy laws. (To learn more about Hammurabi's code, check out The History Behind Insurance.)

Caesar wanted to give debtors a second chance, with a clean slate, rather than the years of slavery faced by most debtors and their families. Unfortunately, he faced opposition from moneylenders who, unlike the senators he simply could replace, had the power to refuse him capital if he ruled against them. In a deft balancing act, Caesar gave moneylenders the power to confiscate the land of nobles in lieu of debt payments while at the same time ending the practice of selling plebeian delinquent debtors into slavery.

Satisfied with their new collection powers, moneylenders were convinced of the prudence of allowing more concessions to debtors. These measures included: wiping the slate clean following a bankruptcy; allowing a man to keep the tools of his trade and related land; and limiting the personal liability of a debtor's immediate and extended family.

After the collapse of the Roman Empire, these laws, though often ignored in practice, were passed on to Papal bankers. When the dark ages gave way to the era of enlightenment, Caesar's bankruptcy laws were reestablished as an important part of the credit system. The last resort of bankruptcy regulations encouraged people to use credit in entrepreneurial ventures, such as trading abroad or building factories. This entrepreneurial drive turned the age of enlightenment into the industrial revolution. Through the long course of history, Caesar's bankruptcy laws have been passed down with most of his basic principles intact.

This question was answered by Andrew Beattie.

  1. Will my credit score suffer from debt consolidation or refinancing?

    You have several options for reducing your debt burden. You can enroll in a professional debt management plan, or consider ... Read Full Answer >>
  2. Can I file for bankruptcy more than once?

    Filing bankruptcy is never a simple decision, but sometimes it is the best thing you can do in your current financial situation. ... Read Full Answer >>
  3. Does consumer protection cover my debts?

    The most impactful consumer protection laws and regulations in the United States are overseen by the Federal Trade Commission ... Read Full Answer >>
  4. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
  5. Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified ... Read Full Answer >>
  6. Is my IRA protected in a bankruptcy?

    All types of individual retirement accounts, or IRAs, recognized under the federal tax code enjoy substantial protection ... Read Full Answer >>
Related Articles
  1. Investing

    How Aliko Dangote Became the Richest African

    An overview of how Aliko Dangote turned a local commodities trading business into a billion-dollar conglomerate.
  2. Investing News

    Austin Set to Rival Silicon Valley

    Over the years, Austin, Texas has lovingly embraced its quirky reputation with the slogan “Keep Austin Weird.” Today, the capital city is attracting several tech startups and investors, making ...
  3. Entrepreneurship

    Top 3 Most Successful Korean Entrepreneurs

    Discover the backgrounds of some of the most successful Korean entrepreneurs and information about the companies and projects leading to their success.
  4. Entrepreneurship

    Top 5 Most Successful Swedish Entrepreneurs

    Understand what makes Sweden a great place for entrepreneurship. Learn about five successful Swedish entrepreneurs who are making big impacts.
  5. Entrepreneurship

    Top 3 Most Successful African Entrepreneurs

    Discover the educational backgrounds and entrepreneurial ventures of some of the most successful and well-known African entrepreneurs.
  6. Investing

    Essential Tips on Making Your Hobby Your Career

    Here are some ways to turn what you love to do for fun into your job.
  7. Entrepreneurship

    Top 5 Most Successful Mexican Entrepreneurs

    Understand why so many socially conscious entrepreneurs have come out of Mexico. Learn about the top most successful Mexican entrepreneurs.
  8. Investing

    Oprah Winfrey Biography

    Oprah Gail Winfrey is an American media magnate, television and film producer, and talk show host with a net worth of roughly $3 billion.
  9. Entrepreneurship

    Want to Open a Small Business? Beware of These

    While all small businesses face long odds, these four types are even less likely to succeed.
  10. Entrepreneurship

    Top 3 Most Successful German Entrepreneurs

    Discover three of Germany's most successful entrepreneurs, their respective entrepreneurial fields and the contributions they made to society.
  1. Debt/Equity Ratio

    Debt/Equity Ratio is debt ratio used to measure a company's financial ...
  2. Venture Capitalist

    An investor who either provides capital to startup ventures or ...
  3. Personal Property Securities Register (PPSR)

    A written, public, online record of legal claims to personal ...
  4. Roll Rate

    The percentage of credit card users who become increasingly delinquent ...
  5. Mini-Miranda Rights

    A statement a debt collector must use when contacting an individual ...
  6. Never Pay Strategy

    A colloquial term used to describe an individual who opens a ...

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!