Bankrupt - Definition - Law Dictionary Home Dictionary Definition bankrupt

Definition :

Bankrupt [fr. bancus, or banque, the table or counter of a tradesman, and ruptus, Lat., broken, denoting thereby one whose shop or place of trade is broken or gone]. A debtor who does certain acts, tending to defeat or delay his creditors, may be adjudged bankrupt, and so made liable to the bankruptcy laws. Before the (English) Bankruptcy Act,1861 (24 & 25 Vict. c. 134), 'traders' only were liable to be made bankrupts, other insolvent debtors being dealt with by a succession of Relief of Insolvent Debtors Acts. See INSOLVENCY.

Means a debtor (as an individual or organization) whose property is subject to administration under the bankruptcy laws for the benefit of the debtor's creditors was adjudicated, Webster's Dictionary of Law, Indian Edn. (2005), p. 43.

Means an individual who has been adjudged bankrupt and in relation to a bankruptcy order, it means the individual adjudged bankrupt by that order, Halsbury's Laws of England, Vol. 3(2), 4th Edn., Para 78, p. 48.

Means a person who cannot meet current financial obligations, an insolvent person; Debtor, Black Law Dictionary, 7th Edn., p. 141.

The Bankrupt Law is distinguished from the ordinary law between debtor and creditor as involving these three general principles:--(1) a summary and immediate seizure of all the debtor's property; (2) a distribution of it among the creditors in general, instead of merely applying a portion of it to the payment of the individual complainant; and (3) the discharge of the debtor from future liability for the debts then existing.

The law of bankruptcy, which dates from 34 & 35 Hen. 8, c. 4, after having been materially extended and altered by numerous statues of early date, and more recently by statutes of 1831, 1849, 1861, 1869, 1883, 1890 and 1913, is now mostly contained in the (English) Bankruptcy Act,1914 (4 & 5 Geo. 5, c. 59), and 1926 (16 & 17 Geo. 5, c. 7), and the (English) General Rules and Deeds of Arrangement Rules,1925, though parts of the Act of 1883 and of the subsequent statutes are left standing'a most inconvenient method of legislation. the petition of bankruptcy should be registered as a 'lis pendens' and the receiving order and adjudication as 'orders' in the Land Charges Register under the (English) Land Charges Act, 1925. As to the effect of Bankruptcy of a proprietor of land registered under the (English) Land Registration Act, 1925, see ss. 41-45 of that Act, and Fortescue Brickdale and Stewart Wallace on the Land Registration Act on s. 40. See ACT OF BANKRUPTCY, and Wace, Williams, or Baldwin on Bankruptcy, and PREFERENTIAL PAYMENTS.

Bankrupt Solicitors.--The (English) Law Society as Registrar of Solicitors may, by the Solicitors Act, 1932 (22 & 23 Geo. 5, c. 37), replacing the (English) Solicitors Act, 1906 (6 Edw. 7, c. 24), refuse to issue certificates (without which a solicitor cannot practise) to bankrupt solicitors.

Clergyman.--Where the bankrupt is a beneficed clergyman the trustee may apply for a sequestration of the profits of the benefice (English) (Bankruptcy Act, 1914, s. 50). Peers and Members of Parliament are disqualified by bankruptcy from sitting or voting [(English) Bankruptcy Act, 1883, s. 32], and in the case of the latter the seat is vacated unless the disqualification is removed within six months (s. 33).

Married women.--A married woman who carries on a trade or business, whether separately from her husband or not, was subject to the bankruptcy laws as if she were a feme sole; see (English) Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59), s. 125; Re Clark, (1914) 3 KB 1095, but now by the (English) Law Reform (Married Women and Tortfeasors) Act, 1935 (c. 30), any married woman (trading or not) is made subject to the Bankruptcy Laws as if she were a feme sole, but if she was not carrying on a trade or business before the 2nd August, 1935, she cannot be made bankrupt in respect of her obligations incurred before that date.

A person who cannot meet current financial obligation; Black's Law Dictionary, 7th Edn.