In the nineteenth century an insolvent person could be thrown into a debtor's prison, or mugged by creditor or their hired thugs. This type of action solved nothing - either for the insolvent debtor or their creditors. Obviously insolvency problems needed a legal solution that provided better results for all parties.

The legislative solution was bankruptcy, where a person's possessions were taken over by a trustee who sold them to pay creditors and eventually released the debtor, free of those debts, back into society. Creditors rarely recovered all their money but at least with bankruptcy the debtor's assets were managed in a more orderly way so that most creditors got something, not just the aggressive or powerful ones. Debtors, stripped of their possessions but not their freedom or their life, were assisted to resolve the bankruptcy and were able to make a new start after a specified period.