What is BANKRUPT? Definition of BANKRUPT in Black's Law Dictionary - Legal dictionary - Glossary of legal terms.
Originally and strictly, a trader who secretes himself or does certain other acts tending to defraud his creditors. 2 Bl.Comm. 471; Shor v. McGregor, C.C.A.Tex., 108 F.2d 421, 423. In a looser sense, an insolvent person; a broken up or ruined trader. Everett v. Stone, 3 Story, 453, Fed.Cas.No.4,577.
In the English law there were two characteristics which distinguished bankrupts from insolvents : the former must have been a trader and the object of the proceedings against, not by, him. As used in American law, the distinction between a bankrupt and an insolvent is not generally regarded. Sturges v. Crowninshield, 4 Wheat. 122, 4 L.Ed. 529; 2 Kent, 390; McCormick v. Pickering, 4 N.Y. On the continent of Europe, however, the distinction still exists. Holtz.Enc. voc. sig. Bankerott.
A person who has committed an act of bankruptcy; one who has done some act or suffered some act to be done in consequence of which, under the laws of his country, he is liable to be proceeded against by his creditors for the seizure and distribution among them of his entire property. Ashby v. Steere, 2 Woodb. & M. 347, 2 Fed. Cas. 15; In re Scott, 21 Fed.Cas. 803; U. S. v. Pusey, 27 Fed.Cas. 632. For "Examination of bankrupt", see Examination.
The term includes one against whom involuntary petition has been filed. United States v. Agresti, C.C.A.N.Y., 130 F.2d 152, 153, 154.
A person who, by the formal decree of a court, has been declared subject to be proceeded against under the bankruptcy laws, or entitled, on his voluntary application, to take the benefit of such laws. See Bankruptcy Act July 1, 1898, c. 541, § 1, 30 Stat. 544 (11 USCA § 1).
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