With the Panic of 1819 in full effect, the shortage of currency made it impossible for many farmers to make the necessary loan payments.
[2] Prior to 1820, with land forfeitures being both a loss of revenue to federal coffers, and a total loss of the purchasers' efforts, Congress had passed 12 similar relief acts, which alleviated the burden on debtors from the requirements of the installment system.
These acts generally extended the time of payment for settlers whose lands were scheduled for forfeiture within that year.
The relief act also gave settlers a 37.5% discount off the original price of the land if they paid the whole amount in full.
The act intended to lower the price of land purchased before 1820, to reduce an owner's existing debt to a level compatible with that of the new system, and to limit the number of forfeitures.