11 Feb Origin of the word bankruptcy.
The word bankruptcy is derived from two Latin words. The word bancus means table or bench and ruptus means broken. In the early 1800’s people used to come together in common areas such as the market place. The open air markets were the original “green” mall with natural lighting and air conditioning. Merchants would set up their businesses either on tables or benches throughout these common areas so that shoppers could purchase the goods or services.
When the merchant could no longer afford to stay in business his table/bench was broken to symbolize that he was no longer welcome do business with the other merchants. It was not uncommon for merchants to operate off a line of credit and your word of honor. However, when the debt would carry over too long, the suppliers would cut the merchant off until the debt was paid in full. The merchant in those times could either pay his debt in trade, money or work off his debt. Either way if the merchant wanted to sell his wares again he would have to pay his debt.
The term bankruptcy combines bancus and ruptus signifying that your bench is broken and you no are no longer able to conduct business. Our society is fortunate today because instead of allowing our creditors to break our table, home, vehicle, etc… you have the power of the United State Bankruptcy Code to legally discharge your debts every eight (8) years without breaking your assets. Filing for bankruptcy is a more peaceful way of handling the overload of one’s debt as opposed to having your table broken or even going to debtor’s prison (outlawed in the early 1800’s).
Remember that knowledge is power and the more knowledge you obtain about bankruptcy the more power you will to understand how the bankruptcy system works.