When most of us were growing up, we learned the story of the wise and fair King Solomon. Solomon was the son of King David of Israel, and is thought to have built the first temple of Jerusalem.
As a symbol of his fairness, so the story goes, he stepped into a dispute between two women claiming to be the rightful mother of a small child. He said, “Well, it’s simple. We’ll just split the baby, and each of you shall have a half.” The women realized what a horrible idea this was, and quickly resolved their dispute.
But perhaps more consequential to our modern society is the sixth king of Babylon, Hammurabi. He ruled over much of what is now Iraq and Iran about 1700 years before the birth of Christ.
What Hammurabi is notable for is “The Code of Hammurabi.” Much of it dealt with crime and punishment, such as “If a man destroy the eye of another man, they shall destroy his eye. If one break a man’s bone, they shall break his bone.” But amongst his 282 laws are many that deal with trade and commerce. It established rules of compensation for work, liability laws for faulty work, fraud, and more.
One of the laws dealt with paying off debts. If a borrower were unable to pay off a debt, the value of compensation was established – “This debt is worth 12 bushels of grain.” For a substantial debt, a borrower and/or his family could be pressed into slavery until the debt was satisfied, but that period could not exceed three years. The amount of debt had to be precisely recorded on a clay tablet, and to ensure reasonable compensation, when the debt was satisfied, the borrower could take the tablet to a local judge or magistrate. That official would wet the clay tablet, dissolving the letters and numbers establishing the debt, and wipe it clean.
Satisfying one’s debt became known as “wiping the slate clean” or “starting with a clean slate.”
Much of Hammurabi’s code is remarkably similar to today’s bankruptcy code – without the slavery and bone-breaking, of course.
The purpose of federal bankruptcy law is to give debtors the opportunity to “make a fresh start” – or start with a clean slate. When you decide to file, you provide paperwork and financial information to a bankruptcy court – establishing the clay tablet that records your debt. As the court and bankruptcy officers evaluate your debts, you’re granted an “automatic stay” that stops debt collection (except in some very rare circumstances). If you comply with certain requirements, the court will eventually issue an order discharging your debts (again, with some very rare exceptions) and your bankruptcy case is over. For certain types of bankruptcy, this process lasts between 4 and 6 months. In other cases, it takes between 3 and 5 years.
And then your slate is wiped clean.
We weren’t around during the time of Hammurabi, but we’ve been helping people navigate bankruptcy for a long time. And the concepts, laws, and structure of modern bankruptcy are based on laws that have existed for thousands of years.
It can be complex, but it’s not impossible. You should let us help you, and not consider splitting the baby.