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Bankruptcy – How to Succeed 2
History: Continued
Since such banking practices were common in Italy, it has been suggested that the Italian words banco rotto, or broken bank, represents the true meaning of the term bankruptcy. Alternatively, some derive the word from the French banque, or table.
Finally, it has been possible to identify the origin of bankrupts from the ancient Roman mensarii or argentarii. They placed their tabernae, or table, or mensae in public places and conducted their business. Should they decide to flee with the money that had been entrusted to them, then all that would be left would be the sign marking the spot where they had conducted their business.
In 1557, 1560, 1575 and 1596, Phillip 2nd of Spain was forced to make public that four separate state banks were insolvent, and so Spain was the first country to declare bankruptcy.
In 1705, a statute was introduced into Anglo-American bankruptcy litigation. Accordingly, should a bankrupt make every effort to repay the outstanding debt, he would be rewarded with the discharge of the outstanding sums.
There is documentary evidence that bankruptcy was commonplace in the Far East. According to a law laid down by Genghis Khan, there was a clause that established the death penalty for anyone who became bankrupt three times.
Current Practices
In the past, for those businesses or individuals who found themselves in a position in which continued trading was not possible, there was little alternative but to close down.
However, things have moved on from this archaic and matter-of-fact treatment. The emphasis today is on restructuring the outstanding debt. This means that the original debt is reviewed in order to determine if there was any means whereby more favourable terms could be secured, so enabling trading to be maintained. In essence, therefore, the focus is on the remodeling of the financial and organisational structure of the debtors experiencing financial distress.
Bankruptcy fraud is classified as a crime. Under current laws relating to bankruptcy, typical common criminal acts include assets which have not been notified to the authorities, relevant documents which have been deliberately destroyed or withheld, various forms of conflict of interest, claims that have been knowingly misleading, false statements or declarations, and fee fixing or redistribution arrangements.
Where bankruptcy forms contain information that has been found to be false, this my lead to a charge of perjury, which is the act of lying or making false statements, that can be verified, on a material matter under oath in a court of law. Filing more than one petition for bankruptcy may not in itself be a criminal act, but it may well violate provisions of bankruptcy law.
In the U.S, laws relating to bankruptcy fraud are particularly focused on the mental state of the participant. Under established common law, the guilt or innocence of a person rested on whether they had committed the crime, and whether they intended to commit the crime.
Bankruptcy fraud is completely different from strategic bankruptcy, which itself may occur when an otherwise solvent company makes use of the bankruptcy laws for some specific business purpose. Although the latter is not designated as a criminal act, it may still act against the filer of the bankruptcy petition.
Bankruptcy – How To Succeed
Peter Radford writes Articles with Websites on a wide range of subjects. Bankruptcy Articles cover History, Role in Europe/US, Types, Prevention.
His Website contains a total of 39 Bankruptcy Articles, written by others and carefully selected.
View his Website at: bankruptcy-how-to-succeed.com
View his Blog at: bankruptcy-how-to-succeed.blogspot.com
About the Author
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