The Bankruptcy Act of 1914 explains the laws of bankruptcy. By this and previous acts, an official of the Board of Trade takes charge of the assets of an insolvent debtor and distributes them pro rata amongst the creditors. Usually, a debtor submits voluntarily to a ‘public examination,’ but when he docs not take this course any creditor may present a petition in bankruptcy against him. Some time after the estate has been administered the bankrupt may petition for his discharge, but the Court will be wary of giving’it him if his assets have realised less than 10s. in the pound, if he did not keep satisfactory accounts, if he went on trading after he knew he was insolvent, if he became insolvent owing to gambling or negligence, &c. No bankrupt’ may obtain credit for £10 or more without disclosing his condition.
A married woman, if she is a trader, may be made a bankrupt on her own application, or on the application of a creditor, or creditors, in accordance with the bankruptcy laws, to all of which she is subject.
In the event of the bankruptcy of a firm, as a general rule, the partnership property must be applied, in the first instance, in payment of the joint debts (I.e., those due from the firm), while the separate property of each partner must be applied in the first instance in payment of his separate debts. Any surplus from the separate property of a partner will go towards payment of the joint debts, and any surplus from the partnership property will be dealt with as part of the respective separate properties, in proportion to the interest of each partner in the partnership property.
It was formerly usual throughout Europe for bankrupts to wear a distinctive dress—in Scotland, for instance, they wore parti-coloured garments. An old English statute made bankruptcy criminal, and by an Act of 1731, a bankrupt secreting his property or books was punished with death. Under this law, John Perrot was hanged in 1761.