Bankruptcy and the ancient world.

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Bankruptcy and the ancient world.

 

 Bankruptcy and the ancient world…

Broke in the ancient world….

One of the earliest recorded instances of insolvent debtors getting a discharge can be found in the Old Testament.  Moses refers to a Jubilee or Holy Year to take place once every fifty years.  During this Holy Year, all debts would be wiped out and those Israelites sold into slavery would be freed.  See Leviticus 25:10-13 which states “Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you; each one of you is to return to his family property and each to his own clan.”

But fifty years is a long time, particularly in the fast paced world of the Old Testament. So Deuteronomy 15:1 increases the frequency of debt forgiveness stating “At the end of every seven-year period you shall have a relaxation of debts, which shall be observed as follows…”

Although the Greeks could forgive flexible sexual roles, being insolvent was a definite no-no.   If a person owed debt that he was unable to pay, then he and his entire family became debt slaves.  There were varying degrees of protection afforded to these slaves either by declaring a safeguard of their person from bodily harm, or only making them slaves for a maximum of five years. But if you were the slave of a debtor who had himself been forced into slavery, you could expect a lifetime treatment of severe and unforgiving work.   

In the East, according to al-Maqrizi, a comprehensive set of laws set forth by Ghengis Khan, sadly no copy of which remains extant, a man who was bankrupt three times received the death penalty. 

Etymology or where the word comes from!

The word ‘bankruptcy’ itself comes from a mixing of the Latin words “bancus” meaning bench or table and “ruptus” meaning broken.   When a banker, who held his marketplace transactions on a bench, was unable to continue lending to people and meeting his obligations, the bench was broken in a symbolic show of this failure and his inability to negotiate. Presumably then, through thousands of oral and written uses, the phrase Bankruptcy was formed. 

The French have their own theory of course.  According to the French, the term ‘bankruptcy’ comes from the phrase ‘banque route.’ This phrase does not refer to something so uncouth as the breaking of a chair, but the far more civilized practice of leaving a sign at a banker’s table in the marketplace to symbolize or declare his insolvency.  The presence of such a sign often meant that someone must be located or traced in a hurry so that they would d not abscond with the money.  

It’s not yet clear what the French intend to gain from this alternate conspiracy theory, or why it is anything other than a bastardized form of the Latin origination story, but they do persist. 

 

Robert S. Vitt
Vitt Law Firm
www.vittlawfirm.com

Article Source:http://www.articlesbase.com/bankruptcy-articles/bankruptcy-and-the-ancient-world-897443.html

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