The Statute of Bankrupts or Bankruptcy Act 1542 ( 34 & 35 Hen. 8. c. 4), was an act passed by the

Parliament of England The Parliament of England was the legislature of the Kingdom of England from the 13th century until 1707 when it was replaced by the Parliament of Great Britain. Parliament evolved from the Great Council of England, great council of Lords Spi ...

in 1542. It was the first statute under

English law English law is the common law list of national legal systems, legal system of England and Wales, comprising mainly English criminal law, criminal law and Civil law (common law), civil law, each branch having its own Courts of England and Wales, ...

dealing with

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...

insolvency In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...

. The act contained an extremely long preamble which denounced debtors acting in fraud of their creditors, directed that the bodies of the offenders and all of their assets be taken by the requisite authorities and the assets be sold to pay their creditors "a portion, rate and rate alike, according to the quantity of their debts". Thereby the first bankruptcy statute also imported into English law for the first time the ''

pari passu ''Pari passu'' is a Latin phrase that literally means "with an equal step" or "on equal footing". It is sometimes translated as "ranking equally", "hand-in-hand", "with equal force", or "moving together", and by extension, "fairly", "without pa ...

'' principle of distribution on insolvency. These principles would later be heavily underscored by the

House of Lords The House of Lords is the upper house of the Parliament of the United Kingdom. Like the lower house, the House of Commons of the United Kingdom, House of Commons, it meets in the Palace of Westminster in London, England. One of the oldest ext ...

in the cases of ''

National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd ''National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd'' 972AC 785 is a decision of the House of Lords in relation to a banker's right to combine accounts under English law. It is the leading English case and a banker's right ...

972 Year 972 ( CMLXXII) was a leap year starting on Monday of the Julian calendar. Events By place Byzantine Empire * Spring – Emperor John I Tzimiskes divides the Bulgarian territories, recently held by the Kievan Rus', into six ...

AC 785 and ''

British Eagle International Airlines Ltd v Compagnie Nationale Air France ''British Eagle International Air Lines Ltd v Cie Nationale Air France'' 9751 WLR 758 is a UK insolvency law case, concerning priority of creditors in a company winding up. Facts A number of airlines agreed to set up a clearing house to manag ...

975 Year 975 ( CMLXXV) was a common year starting on Friday of the Julian calendar. Events By place Byzantine Empire * Arab–Byzantine War: Emperor John I raids Mesopotamia and invades Syria, using the Byzantine base at Antioch to pres ...

1 WLR 758.

Preamble

The preamble to the act is as follows:

Legacy

The whole act was repealed by section 1 of the

Bankruptcy Act 1825 The act 6 Geo. 4. c. 16, sometimes called the Bankruptcy Act 1825, the Bankrupt Act, the Bankrupts Act 1825 or the Bankrupts England Act 1825,This name is punctuated with commas and brackets in various ways by different sources: Baloch, Tariq. ...

( 6 Geo. 4. c. 16).

Notes

References

Roy Goode Sir Royston Miles "Roy" Goode (born 6 April 1933) is an academic commercial lawyer in the United Kingdom. He founded the Centre for Commercial Law Studies at Queen Mary, University of London. He was awarded the OBE in 1972 followed by the C ...

, ''

Principles of Corporate Insolvency Law ''Goode on Principles of Corporate Insolvency Law'' by Sir Roy Goode of the University of Oxford is a leading textbook on UK Corporate Insolvency Law. Since its 5th edition, it has been edited by Professor Kristin van Zwieten, the Clifford Chan ...

'', 3rd ed., para 1-05 Acts of the Parliament of England 1542 Repealed English legislation Bankruptcy in England and Wales Insolvency law of the United Kingdom {{England-statute-stub

Preamble

Legacy

See also

Notes

References