Be a Bankruptcy Lawyer
Think of bankruptcy as an instrument for social repair and individual dignity
Jim Vickaryous
Robert Morris sits in a cold Philadelphia prison. It’s February 1798. A broken man, he looks older than his 64 years. Morris is not a violent man and has not stolen anything. In fact, he is considered a patriot, having done more than most to create a new republic, the United States of America. His only crime is owing the kingly sum of $3,000,000 in 1798 dollars to his creditors. Morris’ plight was disturbing to the revolutionary generation. They had fought eight long years to free themselves from the old regime. But yet, old customs such as debtors’ prisons still enslaved those who could not pay their debts. Prior to the American Revolution, Robert Morris was considered the wealthiest man in the Americas, perhaps even in the entire British Empire. His enterprises spanned oceans in a time when nobody had heard of the word globalism. Morris was credited with funding the American Revolution. When Continental Army soldiers shot at Hessian mercenaries, the musket balls whizzing toward the redcoats were paid for by Robert Morris. In whatever century a man lives in, neither wealth nor wisdom is infinite. Morris lost the last of his dwindling fortune in land speculation deals which failed in the Panic of 1796-1797. Within two years Congress enacted the first federal bankruptcy law, and Morris went free.
Bankruptcy begins etymologically with an image: banca rotta, the broken bench. In medieval marketplaces, a businessman’s bench would be smashed to publicly signal ruin. The language is blunt. Commerce is risky. People can fail. But law does not exist to celebrate ruin. It exists to manage its consequences. The broken bench becomes in law an invitation to order, a means to reorganize commerce and human life so that productivity and dignity may recover.
The Constitution counts bankruptcy among the subjects Congress may regulate. Article I, Section 8 empowers uniform laws on bankruptcies across the United States. That allocation of power sits beside taxing and coining authority because debt, credit, and insolvency are central to national life. The founders understood that unchecked indebtedness can corrode civic stability. The founders gave the gift of financial forgiveness.
Every lawyer ought to have a cursory understanding of bankruptcy, no matter what their practice. Bankruptcy touches everything: real estate, family law, corporate deals, probate, and municipal finance (just to name a few). A judgment creditor in a tort case will need to ensure they don’t violate the automatic stay of bankruptcy. A family lawyer must advise how a bankruptcy filing affects joint debt such as a mortgage. A transactional attorney will want to take into account the possibility of bankruptcy. Non-bankruptcy judges must appreciate the preclusive and remedial consequences that flow from bankruptcy rulings. The point is practical, not academic. Ignoring the basics is professional risk.
Bankruptcy is a concept with ancient roots: the clean start. This is not a modern invention. Ancient societies practiced debt relief in different forms. Almost 4,000 years ago, Babylonian King Hammurabi codified a simple debt relief system. Ancient Israel practiced a Jubilee Year, roughly every 49 years, to restore land and free debtors. Not paying it off, debt compounds. A state populated by people with nothing to lose is not stable. Ancient rulers (who wanted to stay rulers) knew that forgiving debts preserved social order and their popularity.
This historical sweep matters because it anchors a modern lawyer’s perspective. When you advise a client, do not reduce the conversation to numbers alone. Think of bankruptcy as an instrument for social repair and individual dignity. The goal is not cheap mercy. The goal is a recalibration that allows commerce to continue and lives to be rebuilt.
Practical misunderstandings abound. Some borrow the moralistic line from Polonius in Hamlet: “Neither a borrower nor a lender be.” It reads like sound counsel in a single sentence, but it misses the messy reality: lending and borrowing fuel trade and innovation. People will take risks. Markets depend on credit. The legal question is what happens when a risk fails. A bankruptcy system recognizes human fallibility while protecting creditors’ legitimate claims.
Lawyers who embrace the concept of bankruptcy bring two advantages to clients. First, they see options. Reorganization plans in bankruptcy can permit a flawed business to restructure obligations and survive.
Consider how bankruptcy law functions in calamity. During economic shocks, filings rise. That is predictable. Law can be the firewall that prevents collapse from becoming catastrophe. Think of a small Florida business after a hurricane, or a homeowner in 2008 facing the loss of livelihood and a house. The bankruptcy code creates procedures and priorities so that assets are distributed according to rules rather than to chaos. It forces claims into an ordered process. For clients, that order is often the difference between recovery and ruin.
For non-bankruptcy lawyers, practical habits matter. Know when to refer to a bankruptcy specialist. Learn the basics of the automatic stay. Recognize which assets are typically exempt in your state. Understand that a bankruptcy filing can pause collection and give breathing room, but that breathing room is not an end in itself. Advise clients about timing, costs, and likely outcomes with candor. The duty of competence requires it.
None of us wants to end up penniless like Robert Morris. We’re all fortunate that his generation incorporated the ancient concept of a fresh start into our Constitution. Law is both an instrument and expression of values. Our bankruptcy system embraces failure and creates an opportunity for future success and recovery. It is an expression of practical mercy, not sentimentality. Good lawyers learn to hold both creditors’ rights and debtors’ dignity in the same hand, and to use the law to produce fair, durable results. Let’s all resolve to be bankruptcy lawyers.
Jim Vickaryous is the managing partner of the Vickaryous Law Firm in Lake Mary and represents the 18th Circuit on The Florida Bar Board of Governors.
