A:

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.

RELATED FAQS
  1. What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2 ...

    Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy ... Read Answer >>
  2. When will bankruptcy be removed from my credit history?

    I filed for bankruptcy 10 years ago in November. Firstly, I do not know which category I applied for. ... Read Answer >>
  3. How will bankruptcy affect my ability to get credit in the future?

    Learn how filing bankruptcy affects your ability to obtain credit in the future, and find out how long a bankruptcy stays ... Read Answer >>
  4. How will my ex husbands bankruptcy affect the home mortgage in our names?

    My ex and I have both our names on our mortgage loan. We were never married. He is about to file bankruptcy and I'm wondering ... Read Answer >>
  5. What happens if I own a stock that is purchased by another company after filing for ...

    In declaring bankruptcy, a company is basically telling the market that it owes more money than it is worth. If the company ... Read Answer >>
  6. Is credit counseling as damaging as bankruptcy on my credit report?

    Learn whether credit counseling is as damaging as bankruptcy. Bankruptcy wipes out all debts, but it can cut you off from ... Read Answer >>
Related Articles
  1. Investing

    Ceasar's Mulls Offers for Interactive Gaming Unit

    Staring down a possible bankruptcy, Caesars Entertainment (NASDAQ: CZR) has reportedly received bids for its interactive gaming business that value it at some $4 billion. The division is one ...
  2. Markets

    How To Survive A Bankruptcy Filing

    Learn how to make filing for bankruptcy less painful so you can successfully rebuild your financial life.
  3. Investing

    Taking Advantage Of Corporate Decline

    A bankrupt company can provide great opportunities for savvy investors.
  4. Retirement

    How Does Bankruptcy Affect Your IRA?

    Since 2005, money in your IRA can be protected if you are forced to file for bankruptcy.
  5. Retirement

    Bankruptcy Protection For Your Accounts

    Will the plan assets you've worked hard for be safe if you experience a personal financial crisis?
  6. Personal Finance

    Bankruptcy

    Learn what happens when an individual or an organization files for bankruptcy.
  7. Markets

    Bankruptcy Filing Changes That Could Affect You

    When the economy is down, more people file for bankruptcy. Make sure you know about the changes that have been made to this process.
  8. Investing

    Bankruptcy Consequences

    You've done the deed and are out from under your debts – or embarked on a repayment plan. What consequences can you expect and how long will recovery take?
  9. Markets

    What's a Debtor?

    A debtor​ is an individual or company that owes money.
  10. Retirement

    What You Need To Know About Bankruptcy

    Don't choose this last-resort option until you learn how it will affect your future.
RELATED TERMS
  1. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  2. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  3. Bankruptcy Trustee

    A person appointed by the United States Trustee, an officer of ...
  4. Reaffirmation

    An agreement made between a debtor and a creditor to repay some ...
  5. Chapter 7

    A bankruptcy proceeding in which a company stops all operations ...
  6. Involuntary Bankruptcy

    A legal proceeding in which a person or business is requested ...
Trading Center