Statute of Bankrupts facts for kids
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| Long title | An Acte againste suche persones as doo make Bankrupte |
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| Citation | 34 & 35 Hen. 8. c. 4 |
| Dates | |
| Repealed | 1825 |
| Other legislation | |
| Repealed by | Bankruptcy Act 1825 (6 Geo. 4. c. 16 s. 1) |
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Status: Repealed
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| Text of statute as originally enacted | |
The Statute of Bankrupts was an important law passed in 1542 by the Parliament of England. Its full name was An Acte againste suche persones as doo make Bankrupte. This law was the very first one in English law to deal with bankruptcy. Bankruptcy is when a person or company cannot pay back the money they owe. This law was later replaced by the Bankruptcy Act 1825.
Contents
What Was the Statute of Bankrupts?
This law was created to help people who were owed money. Before this law, if someone owed money and then disappeared or hid, it was hard for the people they owed to get their money back. The Statute of Bankrupts aimed to fix this problem.
Why Was This Law Important?
The Statute of Bankrupts was a big step because it brought new ideas into English law.
- It said that if someone couldn't pay their debts, their belongings could be sold to pay back the people they owed.
- It also introduced the idea of pari passu. This means that everyone who was owed money should get a fair share from what was available. No one person should get all their money back while others get nothing. Everyone should be treated equally.
What Did the Law Say?
The law started with a long explanation about why it was needed. It talked about people who cleverly got a lot of goods or money from others. Then, they would suddenly run away or hide at home. They did this to avoid paying back their debts. Instead, they would spend the money they got from others on themselves.
The law gave power to the Lord Chancellor, a high-ranking official. This official could take action against these people. They could even have them arrested. More importantly, the law allowed the official to take all their property and belongings. These items would then be sold. The money from the sales would be used to pay back the people who were owed. The goal was for every person owed money to get a fair share, based on how much they were owed.
See also
- Bankruptcy Act
