Around the year 980, the Federation passed its first piece of bankruptcy legislation, but it soon ceased implementation.
Because people believed this law was too biased towards debtors, as debtors applying for personal bankruptcy would undergo asset liquidation and distribution to all creditors based on debt proportion, without retaining debt.
In simpler terms, if a person owed one million but only had one yuan.
Then all creditors would share that one yuan proportionally, while the remaining 999,999 yuan would be wiped out!
From then on, regardless of whether the debtor worked, started a new venture, or anything else, it would not affect the bankrupt debts.
As a result, some people exploited the feature of non-retention of debt after bankruptcy, constantly committing fraud then applying for bankruptcy.
Asset transfer is something the Federation has been playing around with for many years; they already had an efficient method.
