Bankruptcy

1.

The state or.condition of one who is 2 bankrupt; amenability to the bankrupt laws; the condition of one who has committed an act of bankruptey, and is liable to be proceeded against by his creditors theretor, or of ons whose circumstances are such that he is entitled, on his voluntary application, to take the benefit of the bank- Tupt laws. The term is used in a looser sense as synonymous with “insolvency,”— inability to pay one’s debts; the stopping and breaking up of business because the trader is broken down, insolvent, ruined.

See2 Story, 354, 359, 2.

The term denotes the proceedings taken, under the bankrupt jaw, against a person (or firm or company) to have him adjudged a bankrupt, and to have his estate administered for the benefit of the creditors, and di-. vided among them.

3.

That branch of jurisprudence, or system of law and practice, which is concerned with the definition and ascertainment of acts of bankruptey and the administration of bank- Tupts’ estates for the benefit of their creditors and the absolution and restibution of bankrupts. As to the distinction between bankruptcy and G insolvency, it may be said that insolvent laws operate at the instances of an imprisoned debtor; bankrupt laws, at the instance of a creditor. But the line of partition between baukrupt and insolvent laws is not so distinctly marked as to define H what belongs exclusively to the one and not to the other class of laws.

4 Wheat. 122.

Insolvency means a simple inability to pay, aa debts should become payable, whereby the debtors business would ba broken up; bankruptey means the particular legal status, to be ascertained and declured by a judicial decree.

2 Ben, 198.