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Bankruptcy

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BANKRUPTCY is in England the subject of, and regulated by, the Bankruptcy Acts, 1883-1890, of which the Act of 1883 is the principal ; and the Bankruptcy Rules which have been made thereunder. The term is applied to the distribution of the property of an insolvent person among his creditors with a view to the complete discharge thereby of the insolvent.

Who may become bankrupt, and how.—Generally speaking, all persons capable of making binding contracts may be the subjects of bankruptcy proceedings, except married women without separate property and not carry ing on trade separately from a husband. Thus, foreigners ordinarily residing or having a dwelling-house or place of business in England, convicts, peers, persons already undischarged bankrupts, and partnership firms may be pro ceeded against in bankruptcy. But a limited company should be proceeded against by way of winding up. In order that a man may make himself a bankrupt, all that is necessary is for him to present a petition to the Court, the procedure relating to which w ill be found in the article PETITION. But for a man to be liable to be made bankrupt by another, it is necessary that such other person should be his creditor in respect of a debt which he can prove upon oath ; and that he himself should within the preceding three months have committed an ACT OF BANKRUPTCY. Only under such circumstances can a creditor force his debt6r. into bankruptcy, upon pre sentation of a petition to the Court. The debtor may, however, as an exceptional proceeding, be made a bankrupt upon the hearing of a judgment summons.

The Court.—Bankruptcy in the London Bankruptcy District is within the jurisdiction of the High Court of Justice ; outside that district it is within that of the County Courts. The London Bankruptcy District in cludes the city of London and all parts of the metropolis and other places situate within the district of any of certain County Courts. Such County Courts are—Bloomsbury, Bow, Brompton, Clerkenwell, Marylebone, Shore ditch, Westminster, and Whitechapel in Middlesex, and Lambeth and Southwark in Surrey. The rules determining the jurisdiction of the above Courts in particular cases, as also those relating to the nature of the debt upon which intending bankruptcy proceedings may rest, are set out in our separate consideration of the petition. We will here assume that the act

of bankruptcy has been committed, that the creditor's debt is available for a petition, and that the latter is in course of presentation.

It can never be too late for the consideration of a man's financial position so long as the irrevocabl% steps have not been taken and his property seized and sold. Bankruptcy, ;s capable either of being a benefit or an injury to the bankrupt. If he is insolvent, it is for their benefit that his creditors should have his property equally distributed amongst them, and it is for his own benefit that he should be released from all further claims. It may be an injury, if he has a profitable business or a lucrative position or profession, the value of which, present and future, depends upon his preserving an appearsince of solvency.

By committing the act of bankruptcy and allowing a receiving order to be made against him upon the hearing of the petition, and suffering a subsequent adjudication of bankruptcy, all his property will be realised for the purpose of distribution amongst his creditors. Such realisations of property often produce very little, and never the full value. Bankruptcy, moreover, apart from its sentimental effect, entails disabilities professional and social, and most probably a diminution of the power of earning money in the case of salaried persons and those engaged in personal and professional occupations. Bankruptcy may involve, therefore, a very material ruin to the peyson concerned ; a ruin out of which only the most ingenious and determined may hope to emerge without serious loss of position, property, and self-respect. Wherefore special attention should be given to the subjects of ACTS OF BANKRUPTCY (q.e.) and of the petition. And no less attention should be paid to the subsequent proceedings, especially the possi bilities of a composition or a scheme of arrangement, the proposal and accept ance of either of which may at the last moment prevent a bankruptcy adjudication and its inevitable results. And still later lies the possibility of annulment. Whilst this view of the subject has occupied our attention, we will assume that the creditors' petition has been granted.

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