Bankrupt or insolvent debtor?

This guide was last updated in 2012

It is important to remember that these are two different things and would be treated differently by the legal system. It was not illegal to be a bankrupt, but it was to be an insolvent debtor.

An insolvent debtor was someone who was unable to pay their debt and would be punished by being sent to a local prison until they were able to pay back what they owed. Therefore, they could languish in prison indefinitely.

On the other hand, it was not illegal to declare oneself bankrupt and, although it was only meant to be for tradesmen, many people falsely pretended to have a trade (often by using the term ‘dealer’ or ‘chapman’) to be able to declare themselves bankrupt.

You would also have to be in debt over £100 (reduced to £50 after 1842) and then you would be able to petition the court.

 

Bankruptcy and insolvency
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