Bankruptcy

Definition of Bankruptcy

Note: See a more comprehensive approach to the Bankruptcy legal concept in the American Law Encyclopedia

A process for freeing persons from some liability for debts. Bankruptcy proceedings are governed by federal law, specifically the Bankruptcy Act and amendments to it. Commencement of the bankruptcy process may come at the initiative of the debtor or a group of creditors. Such proceedings are conducted by bankruptcy courts, which are an arm of the United States District Courts (see). Bankruptcy referees have historically been selected by district court judges. In 1984, Congress enacted new legislation that leaves bankruptcy matters with the district court but provides that bankruptcy judges be appointed to 14-year terms by the court of appeals for the circuit in which the district is located. Some cases under the Bankruptcy Act are handled as “straight” bankruptcy, where a trustee liquidates certain specified assets of the debtor and distributes the proceeds among the creditors. The act also has what are called “rehabilitative” provisions (Chapters 11 and 13), which allow a debtor to reorganize instead of liquidate in hopes of paying off accumulated debts with future earnings under reorganization. The act protects the debtor during the course of such an attempt.

See Also

Legislative Court (Law of the United States) United States District Court (Law of the United States) (Law of the United States).

Resources

Bankruptcy Related Resources

• Bankruptcy in the United States Legal Encyclopedia
• Judicial Organization Keywords in the United States Legal Encyclopedia
• Judicial Organization Keywords in the International Legal Dictionary

Notes

• “Bankruptcy”, The American Law Dictionary, 1991, California

Bankruptcy

In the Past

The state or condition of a bankrupt.

Developments

Bankrupt laws are an encroacbment upon the common law. The first in England (see more about this legal system) was the stat. 34 and 35 H. VIII., c. 4, although the word bankrupt appears only in the title, not in the body of the act. The stat. 13 Eliz. c. 7, is the first that defines the term bankrupt and discriminates bankruptcy (see more about this popular legal topic in the U.S. encyclopedia) from mere insolvency. Out of a great number of bankrupt laws passed from time to time, the most considerable are the statutes 13 Eliz. c. 7; 1 James I., c. 19 21 James I., c. 19 5 Geo. II., c. 30. A careful consideration of these statutes is enough to give am adequate idea of the system of bankruptcy (see more about this popular legal topic in the U.S. encyclopedia) in England (see more about this legal system). See Burgess on Insolvency, 202-230.

Details

The constitution (see more about this popular legal topic in the U.S. encyclopedia) of the United States of America, art. 1, s. 8, authorizes congress “to establish an uniform rule of naturalization and uniform laws on the subject of bankruptcies throughout the United States of America.” With the exception of a short interval during which bankrupt laws existed in the United States of America, this power lay dormant till the passage of the act of 1841, since repealed.

Other Aspects

Any one of the states may pass a bankrupt law, but no state bankrupt or insolvent law can be permitted to impair the obligation of contracts; nor can the several states pass laws conflicting with an act of congress on this subject 4 Wheat. and the bankrupt laws of a state cannot affect the rights of citizens of another state. 12 Wheat. It. 213. Vide 3 Story on the Const. 1100 to 1110 2 Kent, Com. 321 Serg. on Const. Law, 322 Rawle on the Const. c. 9 6 Peters Reports 348 Bouv. Inst. Index, h. t. Vide Bankrupt. [1]

Resources

Notes and References

1. Partialy, this information about bankruptcy is based on the Bouvier's Law Dictionary, 1848 edition. There is a list of terms of the Bouvier's Law Dictionary, including bankruptcy.

See Also

Bankruptcy (Judicial Organization)

Meaning of Bankruptcy

This is a brief definition of bankruptcy; a term used, in general, in the field of procedural law within the United States: Procedure in the federal courts (but not state courts), by which a person or business is relieved of certain debts.

Chapter 11 (reorganization) Bankruptcy in the United States

There is an additional definition in the world law dictionary.

Resources

See Also

• Bankruptcy proceedings (Business reorganizations )

Chapter 12 (farmer) Bankruptcy in the United States

There is an additional definition in the world law dictionary.

Resources

See Also

• Bankruptcy proceedings (Family farmer bankruptcy )

Chapter 7 (liquidation) Bankruptcy in the United States

There is an additional definition in the world law dictionary.

Resources

See Also

• Bankruptcy proceedings (Straight bankruptcy )

Chapter 13 (wage Earner's) Bankruptcy in the United States

There is an additional definition in the world law dictionary.

Resources

See Also

• Bankruptcy proceedings (Wage earner's plan )