The ability to walk away from unsustainable debts and start all over again is one of the distinctive quirks of American capitalism. There were no debtors’ prisons in the United States in the early 1800s, at a time when English debtors could end up languishing in jail for years. Since 1898, it has been every American’s right to file for Chapter VII (liquidation) or XIII (voluntary personal reorganization). Rich and poor alike, people in the United States appear to regard bankruptcy as an ‘unalienable right’ almost on a par with ‘life, liberty and the pursuit of happiness’.
