Bankruptcy History

This word is formed from the ancient Latin bancus a bench, or table, and ruptus, broken.

Bank originally signified a bench, which the first bankers had in the public places, in markets, fairs, etc. on which they told their money, wrote their bills of exchange, etc. Hence, when a banker failed, they broke his bank, to advertise to the public that the person to whom the bank belonged was no longer in a condition to continue his business.

As this practice was very frequent in Italy, it is said the term bankrupt is derived from the Italian banco rotto, broken bench (see e.g. Ponte Vecchio).

Others rather choose to deduce the word from the French banque, table, and route, vestigium, trace, by metaphor from the sign left in the ground, of a table once fastened to it and now gone.

On this principle they trace the origin of bankrupts from the ancient Roman mensarii or argentarii, who had their tabernae or mensae in certain public places; and who, when they fled, or made off with the money that had been entrusted to them, left only the sign or shadow of their former station behind them.

Bankruptcy and Insolvency Fraud

Bankruptcy fraud is big business in North America. It's a crime perpetrated by either a trustee when accepting a Bankruptcy that is not legitimate with the intent of monetary reward by way of committing property theft and property fraud most often supported and committed by the power base such as lawyer(s) and their firm, the banks, the government and ultimately the courts.

The most common form of bankruptcy fraud is concealing assets. Concealment of assets can also come in the form of concealment of value of the assets when filing for bankruptcy.

The Bankruptcy and Insolvency Act in Canada gives the Officer Receiver no authority at this time to reject an assignment in bankruptcy on the grounds that the debtor is not truly insolvent, however the trustee still is not entitled to rely on the representations of the bankrupts regarding the status of their debts but must take sufficient care and reasonable steps to ascertain the status of debts as being unsecured or secured.

In cases, mainly of matrimonial disputes, due to the power vested in the trustee by the Bankrupcty and Insovency Act, the trustees is entitled to seize assets without involving the Court and the Sheriffs.

J4Y suggest you click on the following links to read on how the bankruptcy system is often times used for improper purposes.

Bankruptcy Fraud of Spouse

Bankruptcy Reform in the United States

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S.256), was signed into law by President Bush on April 20, 2005.

While some provisions of the law became effective immediately, all provisions relating to personal bankruptcy became law on October 17, 2005.

Here are the top five changes to bankruptcy legislation introduced by this legislation.

i. Means Test to be Eligible to File Under Chapter 7

ii. In a move to force more debtors into a Chapter 13 wage earner repayment plan, instead of allowing for a straight liquidation bankruptcy under Chapter 7, the trustee or any creditor can bring a motion to dismiss a Chapter 7 application if the debtor's income is greater than the state median income.

In simple terms: if your income is too high, you will probably be required to file a 5 year repayment plan under Chapter 13.

If a debtor's current net monthly income (based on the last six month's average), less one-sixtieth of secured payments and priority debts, less allowed expenses permitted by the IRS and certain other allowed expenses, is greater than $100 per month, the trustee or any creditor can request that you be required to file under Chapter 13.

While it is too early to know for sure, it is assumed that this change will increase the number of Chapter 13 plans filed, and therefore increase the amount of money distributed to creditors during bankruptcy proceedings.

This is a new and complicated area of the law, so the advice of a bankruptcy attorney is essential.

Bankruptcy in Canada

Bankruptcy in Canada is laid out by federal law, set out in the Bankruptcy and Insolvency Act and is applicable to businesses and individuals.

The office of the Superintendent of Bankruptcy, a federal agency, is responsible for ensuring that bankruptcies are administered in a fair and orderly manner.

Trustees in bankruptcy administer bankruptcy estates. Big law firms in Canada are involved in Bankruptcy and Insolvency for the purpose of the huge amount of money it brings to the firm and to the lawyers.

In the case of Air Canada, when it filed for bankruptcy protection in year 2003, many players at the top, namely the trustees, and the lawyers made money. At one time, there were 125 lawyers in court with different applications waiting to be heard on the matter of Air Canada.

Bankruptcy Reform in Canada

The Bankruptcy and Insolvency Act was last updated in 1997. On June 3, 2005 the government introduced insolvency reform legislation in parliament. As of August 2005 it is not known if or when this proposed legislation will become law but one thing is for sure, the bankruptcy proceedings was created mostly for criminals who find shelters from any creditors.


Insolvency and Restructuring in Canada

2009 Bankruptcy Restructuring in Canada

Identifying Bankruptcy Fraud

Justice is a conscience, not a personal conscience but conscience of the whole of the humanity.
Those who clearly recognize the voice of their own conscience usually recognize also the voice of Justice.
Alexander Solzhenitsyn