Between Norm and Practice (15th to 21st Century)
Writing in 1697 on bankrupts Daniel Defoe, the author of Robinson Crusoe, thought the English law on bankruptcy “has something in it of Barbarity”. He continues:
It gives a loose to the Malice and Revenge of the Creditor, as well as a Power to right himself, while it leaves the Debtor no way to show himself honest: It contrives all the ways possible to drive the Debtor to despair, and encourages no new Industry, for it makes him perfectly uncapable of any thing but starving.1
With these few words Defoe describes the hardships unfortunate traders faced in early modern England. Defoe suffered from the fate of a bankruptcy himself. After various unsuccessful ventures, among others in the wine trade with Portugal, and underwriting in insurance, he was declared bankrupt for more than £17,000 in 1692. Harassed by recalcitrant creditors he was committed to prison for several months, after a composition had failed, because four of his 140 creditors had refused to consent to an agreement. As the contemporary bankruptcy law contained no provisions for discharge Defoe remained liable with his future earnings. The harshness and cruelty of the law towards the debtor, he argues, “cast [him] out of Human Society, and expos’d [him] to Extremities worse than Death” Moreover, he thought that the bankruptcy laws were not only inhumane to the debtor but also of no advantage to the creditor.2
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