The 1841 bankruptcy act mainly discharged debts with creditors recovering pennies on the dollar.

Evidence

Earlier bankruptcy laws had been drafted primarily to protect the creditors of an insolvent person; the point was to make sure that everyone with cargo in a sinking ship was fairly and equitably treated. The act of 1841 was at least equally interested in another possible goal of bankruptcy: to wipe clean the debtor’s slate. … Charles Warren, who studied its operation, reported that 33,739 persons took advantage of the law; 440,934,000 in debt was canceled; a mere 43,697,357 was surrendered by debtors. In most cases, the creditors got little or nothing. In one district in New York, studied by Edward Balleisen, the creditors received, on average, thirteen cents on the dollar. This was in fact unusual; in many places, one cent on the dollar was more typical. — Lawrence M. Friedman, A History of American Law, 1596

Categorization

• QUESTION: The aggregate debt figures imply roughly 90% of obligations were effectively canceled — worth chasing down what share was actually collectible versus paper.
• XREF: connects to: Early federal bankruptcy acts were crisis-driven and short-lived — Lawrence M. Friedman, A History of American Law, 1592