3 May /16


Bankrupt - Word of the day - EVS Translations
Bankrupt – Word of the day – EVS Translations

Though it has become more common recently, there are still many misgiving and misunderstanding regarding the word bankrupt. Considering that, in the United States alone, there are been about a million bankruptcy filings annually for the past 15 years, perhaps it is time that we take a closer look at this word.

First used in English by Sir Thomas in More’s Apologye of 1533, the term initially applied solely to traders (such as in a market) and not to individuals, which is somewhat distant from our modern, general understanding of the term as just meaning a lack of the ability to meet obligations.

Coming from the Middle French bancque roupte, the origin of the term is the Italian banca rotta, which literally means ‘a broken bench.’

While the word banca can be translated as ‘bench’ or ‘moneylender’, the meaning comes from the idea that a merchant/trader would occupy a literal bench in a marketplace, and, being unable to pay their obligations, the merchant’s bench would be physically broken, preventing them from doing business in the market.

From its original meaning, we have seen a remarkable shift: by 2012, business-based bankruptcies only accounted for 3% of total bankruptcies, the rest were from individuals.

Having become a lot more commonplace than it once was, being bankrupt has lost a large degree of the social stigma that it once possessed; however, some of the fallacies associated with it have remained.

Bankrupt – explanation

First, being bankrupt has little to do with being lazy or excessive spending: circa 1653, Zachary Boyd wrote in Zion’s Flowers that: “He who in sloth does like a Dormouse sleep, Shall at the last sure prove a Bankrupt;” however, data shows that the majority of financial issues are caused by serious illness, job loss, or divorce.

Second, the bankruptcy process is not a free way to gain material possessions: bankruptcy proceedings typically involve an agreed upon repayment plans for some debts, but, as we can see from a 1776 edition of the Newcastle Journal, stating that: “The commissioners in a commission of bankrupts..intend to meet..in order to make a dividend of the..bankrupt’s estate and effects,” this process is nothing new.

Third, though it is intended to provide relief from temporary hardship, being bankrupt was never meant to be a “way of life:” a precursor to modern laws, writing in 1800, Archibald Cullen, in Principles of the Bankrupt Law, correctly posits that: “Although a bankrupt is discharged by a certificate regularly obtained, he may preclude himself from the benefit of it, by making himself liable on a new promise.”