BANKRUPT - A person who has done,
or suffered some act to be done, which is by law declared
an act of bankruptcy; in such case he may be declared
a bankrupt.
It is proper to notice that there is much difference
between a bankrupt and an insolvent. A man may be
a bankrupt, and yet be perfectly solvent; that is,
eventually able to pay all his debts or, he may be
insolvent, and, in consequence of not having done,
or suffered, an act of bankruptcy. He may not be a
bankrupt. Again, the bankrupt laws are intended mainly
to secure creditors from waste, extravagance, and
mismanagement, by seizing the property out of the
hands of the debtors, and placing it in the custody
of the law; whereas the insolvent laws only relieve
a man from imprisonment for debt after he has assigned
his property for the benefit of his creditors. Both
under bankrupt and insolvent laws the debtor is required
to surrender his property, for the benefit of his
creditors. Bankrupt laws discharge the person from
imprisonment, and his property, acquired after his
discharge, from all liabilities for his debts insolvent
laws simply discharge the debtor from imprisonment,
or liability to be imprisoned, but his after-acquired
property may be taken in satisfaction of his former
debts.
