Failed bankers used to break tables - or banks

The word bankruptcy is formed from the ancient Latin bancus (a bench or table), and ruptus (broken). A "bank" originally referred to a bench, which the first bankers had in public places, in markets, fairs, etc. on which they tolled their money, wrote their bills of exchange, etc. Hence, when a banker failed, he 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 bank. Others choose rather to derive 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.

Philip II of Spain had to declare four state bank-ruptcies in 1557, 1560, 1575 and 1596. Spain became the first sovereign nation in history to declare bank-ruptcy.

The characteristic discharge of debts was introduced to Anglo-American bankruptcy with the statute of 4 Anne ch. 17 in 1705, where the discharge of unpayable debts was offered as a reward to bank-rupts who cooperated in the gathering of assets to pay what could be paid.

Bankruptcy

Bankruptcy is a legally declared inability or impairment of ability of an individual or organisation to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or organisation). In the United States, it is often referred to as Chapter 11. There are instances where companies seeking bankruptcy protection, have come back with a strong performance and they not only pay off their debts but also later expand their business. In the UAE most foreign businessmen who default are known to elope, leaving worthless cheques and debts. Analysts believe that a bankruptcy law could help these companies in difficult times, and that they could make a comeback when the economy recovers.