Bankrupt

“ It is no new doctrine that the assignee or trustee in bankruptcy stands in the shoes of the bankrupt, and that the property in his hands, unless otherwise provided in the bankrupt act, is subject to all of the equities impressed upon it in the hands of the bankrupt. ”

“ Failure is purely and simply the suspension of payments resulting from circumstances independent of the will of him who fails. Bankruptcy, on the contrary, is suspension of payments resulting either from imprudence or from mistakes of the bankrupt. ”

“ It is the purpose of the bankrupt act to convert the assets of the bankrupt into cash for distribution among creditors, and then to relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes. ”

“ For the rich bankrupt is really rather a pampered creature. Here you have the younger son of a duke whose creditors are mostly money-lenders and tradesmen, whose downfall is due to betting, and who has known of his insolvency for a long [107] period, owing £36,631, and his assets are £100. The Official Receiver drops a silent tear of pity over the statement of affairs, and, like the tear of the recording angel, it blots out the record and the younger son goes forth ducally to prey upon a new generation of creditors. ”

“ There are a lot of big, expensive law books written on this subject by clever fellows who spend their lives soothing the bankrupt’s last hours and winding him up according to law and order, with costs out of the estate, but you need not study these to learn how to become a bankrupt. Most bankrupts are [Pg 115] pig-headed fellows, and achieve bankruptcy in their own foolish amateur way. ”

“ By the corresponding provision of the bankrupt act of 1867, any person who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, 'procures or suffers his property to be taken on legal process, with intent to give a preference to one or more of his creditors,' 'or with the intent, by such disposition of his property, to defeat or delay the operation of this act,' was deemed to have committed an act of bankruptcy. ”

“ That this loose state of the bankrupt law may be, and has been a cause of much dishonesty, is true, but at the same it is the cause of the flourishing state of the community. The bee can always work; indeed the bankrupt-laws themselves provide for a man’s not starving. In the city the bankrupt’s household furniture is sacred, that his family may not be beggars ”

“ And the working man thinks to himself of the twenty or thirty pounds that he owes, and how pleasant it would be if an accountant would add it up and a judge tell him that he need not worry any more about it; but when he begins to inquire further into the subject he finds that bankruptcy is one of the good things of this world that he cannot afford.
Bankruptcy, successful bankruptcy, is not so easy of achievement as you might think. It is not everyone who knows how to become a bankrupt. ”

“ Not even a newsboy assails the two solitary passers-by with an extra penny-paper from the office of the Times or Mail, containing a full account of yesterday’s terrible catastrophe. Of all the dull times that merchants and speculators have known, this is the very worst; for, so far as they were concerned, creation itself has taken the benefit of the Bankrupt Act. ”

“ To begin with, you certainly want money, or at least an overdraft and plenty of credit. Intending bankrupts generally wear very good clothes; especially are they particular about the shine of their silk hat. Bankers and intelligent business men have, in all ages, given credit to top hats, white waistcoats, and gold watch chains. The poor man has none of these, and therefore cannot obtain that overdraft which is one of the first essentials of bankruptcy.
The bankrupt has a curious affection for jewellery. ”

“ That being so, he had, as assignees in bankruptcy have upon the property of the bankrupt, a lien upon the property of a judgment debtor, under an appointment in a creditor's bill. But that cannot be so. An assignee in bankruptcy in England, and in this country when it had a bankrupt law, is an officer made by the statute of bankruptcy, with powers, privileges, and duties prescribed by the statute, for the collection of the bankrupt's estate for an equal distribution of it among all of his creditors. ”

“ At this speech, all the fortune creditors congratulate each other and shake hands. After the ratification of the certificate, the bankrupt becomes once more a merchant, precisely such as he was before; he receives back his securities, he continues his business, he is not deprived of the power to fail again, on the promised dividend,—an additional little failure which often occurs, like the birth of a child nine months after the mother has married her daughter. ”

“ As to individual debts, we long ago abandoned, as impractical, the theory that a bankrupt must pay the uttermost farthing or go to prison. If there ever was a time when the modern theory of treating bankrupts should be extended to nations it is now. ”

“ It is an occurrence in the life and fortunes of an individual. When a man cannot pay his debts, we say that he has become bankrupt, or has failed. Bankruptcy is not merely the condition of a man who is insolvent, and on whom a bankrupt law is already acting. ”

“ And so careful was Congress to protect the rights acquired by an honest creditor, that unless bankrupt proceedings are commenced by or against the debtor within four months after such a preference, it should stand good, though the creditor knew the debtor was insolvent, and knew that the conveyance was intended to defeat the purpose of the bankrupt law in securing equality of distribution of the debtor's property. ”

“ And so, by the Code de Commerce, III, 4, I, even the simple bankrupt in contradistinction to the fraudulent bankrupt is punished, and every person unable to pay his debts is declared a simple bankrupt, who, among other things, has made excessive household expenses, or lost considerable sums by play etc. ”

“ The statute defines "a notour bankrupt" to be any debtor who, being under diligence by horning or caption, at the instance of his creditors, shall be either imprisoned, or retire to the abbey or any other privileged place, or flee or abscond for his personal security, or defend his person by force, and who shall afterwards be found, by sentence of the lords of session, to be insolvent. ”

“ O call not to my Mind what you have done,
It sets a Debt of that Account before me,
Which shews me Bankrupt even in Hopes. ”

“ Until, then, we have established a living wage for the worker, the question of his bankruptcy is in a large measure academic. At present bankruptcy, like divorce, is rightly regarded as a luxury for the well-to-do. I know that to some minds the word “bankruptcy” connotes poverty, but if you look into the facts and history of the matter, you will find that, though bankruptcy may on occasion lead to poverty, a poor man never does, or can, become a bankrupt. ”

“ In the English system the bankrupt laws are limited to persons, who are traders, or connected with matters of trade and commerce, as such persons are peculiarly liable to accidental losses, and to an inability of paying their debts without any fault of their own. ”

“ WHEREAS many Persons have and do daily become Bankrupt, not so much by reason of Losses and Unavoidable Misfortunes, as to the intent to Defraud and Hinder their Creditors of their just Debts and Duties to them Due and Owing ”

“ On the 9th of September, 1869, a creditor of the corporation respondents filed a petition in bankruptcy against the company, in the office of the clerk of the District Court, and on the twenty-fourth of the same month the District Court adjudged the said paper manufacturing company to be bankrupts within the true intent and meaning of the Bankrupt Act. ”

“ Equal distribution of the property of the bankrupt, pro rata, is the main purpose which the Bankrupt Act seeks to accomplish, and it is clear to a demonstration that the end and aim of those who framed the act must be defeated in this case if the proceedings of the judgment creditors are sustained, as they have perfected liens, by those proceedings, upon all or nearly all of the visible property of the bankrupts. ”

“ His subsequent earnings were his own. A bankrupt might often desire, out of the proceeds of his exempted property, or out of his means earned since his bankruptcy, to purchase property which he has surrendered to the assignee. ”

“ The effect of all laws which touch private interests is to develop, enormously, the knavery of men's minds. The object of a bankrupt, like that of other persons whose interests are thwarted by any law, is to make void the law in his particular case.
The status of civil death in which the bankrupt remains a chrysalis lasts for about three months,—a period required by formalities which precede a conference at which the creditors and their debtor sign a treaty of peace, by which the bankrupt is allowed the ability to make payments, and receives a bankrupt's certificate. ”

“ The spirit of this resolution still survives, for until a trader has paid every penny that he owes he is not rehabilitated and remains under the stigma of various disabilities: he has no political rights, he cannot hold any public office, or act as a stockbroker, or sit on a jury. Banqueroute simple is where the bankrupt has been guilty of grave faults in the conduct of his business, such as extravagance in living, hazardous speculation or preferring creditors. ”

“ When a man becomes bankrupt all his property, with the exception of the tools of his trade and the necessary wearing apparel and bedding for himself, wife, and children, to the value of 20, will vest in the official receiver and trustee. These officials will also be able to claim for the benefit of the creditors future acquisitions of property until the bankrupt has obtained his discharge. ”

“ Also the minor children of a naturalized citizen, if dwelling in the United States at the time of his naturalization, become citizens.
§5. A bankrupt is an insolvent debtor; that is, a person who is unable to pay all his just debts. A bankrupt law is a law which, upon an insolvent's giving up all his property to his creditors, discharges him from the payment of his debts. Such laws are designed for the benefit of honest and unfortunate debtors, who, by having the enjoyment of their future earnings secured to them, are encouraged to engage anew in industrial pursuits. ”

“ If any business man or business firm does the same thing, they are, by the express terms of every bankrupt law, bankrupts. By the bankrupt law of England and of the United States, and by the insolvency laws of Massachusetts and many other States, the person or the partnership in business which is no longer able to pay its current debts as they fall due is insolvent. ”

“ If any man thinks the bankrupt has so much favour by these articles, that those who can dispense with an oath have an opportunity to cheat their creditors, and that hereby too much encouragement is given to men to turn bankrupt ”

“ Then the effects are described as to the person and juristic status of the bankrupt, as to his property, and as to the acts performed by him; the operations of bankruptcy; the closing of it, by composition relinquishment of assets, and other methods; the rehabilitation of the bankrupt; and preventive compositions or compositions before bankruptcy. The second part of the essay relates to Bankruptcy in the United States under the National Bankrupt Law and the insolvent laws of the several States. ”

“ The bankrupt act of 1898, § 2, invests the courts of bankruptcy 'with such jurisdiction, at law and in equity, as will enable them to exercise original jurisdiction in bankruptcy proceedings, in vacation in chambers, and during their respective terms;' to make adjudications of bankruptcy ”

“ That the effect of such relation, so enacted by the statute, is to annul all subsequent acts by which the assets of the bankruptcy are attempted to be diverted from the general fund for distribution among the several creditors of the bankrupt, is a doctrine well settled by very many adjudged cases. ”

“ BANKRUPTCY LAWS, regulations passed by a competent authority with a view to distributing the property of an insolvent equitably among his creditors and free the debtor from further obligation. In England, before 1841, only a tradesman could be a bankrupt. ”

“ Speedy administration as well as equal distribution of the assets among the creditors is the policy of the Bankrupt Act, and the former is almost as necessary as the latter to accomplish the beneficent ends for which the law was passed. ”

“ I only introduced it to shew where the constant mortgaging of a public revenue may end; and to disprove the vulgar notion, that by contracting debts beyond a certain sum, a trading nation which has a great balance in its favour, must be involved in an unavoidable bankruptcy. To say that a nation must become bankrupt to itself, is a proposition which I think implies a contradiction. ”

“ As a starting-point for a new education at fifty-five years old, the shock of finding one's self suspended, for several months, over the edge of bankruptcy, without knowing how one got there, or how to get away, is to be strongly recommended. By slow degrees the situation dawned on him that the banks had lent him, among others, some money--thousands of millions were--as bankruptcy--the same--for which he, among others, was responsible and of which he knew no more than they. ”