- Insolvency and Bankruptcy in C19th
Many of us are surprised to read that our ancestors were in any way associated with insolvency or bankruptcy.
It was far more common that we possibly suspect for our ancestors to have become insolvent or bankrupt in the 19th century. The poor laws as they existed might have kept the poor at subsistence level but what happened if your ancestor ran a business? What happened when lines of credit ran out? How did society deal with those who owed money?
Insolvents and bankrupts appear occasionally in everyone’s family history and sometimes an ancestor appears in a debtors prison.
- Many people fell into debt for small amounts of money and until the mid to late 18th century, imprisonment was the common punishment
- It was however seen that imprisonment for debt did not solve the issue of the debt getting repaid, so fewer people were imprisoned as long as they cooperated with the authorities in clearing their debt
- Where they were imprisoned, they were kept separate from ordinary criminals and had greater freedoms. Where possible debts were paid off by friends and family members
When debts could not be paid back, people became insolvent debtors or they were made bankrupt
- Insolvent debtors were people who could not pay back their debts, they remained responsible for them and these were the debtors for whom prison was likely to be a long term spell
- To be made bankrupt the debtor had to be a trader, buying or selling goods and had to be unable to repay the debt. Monies owing had to be substantial, up to 1841 it was £100
In the case of bankruptcy, the entire debt is written off, all be it that the bankrupt person is no longer allowed to manage their affairs. The insolvent debtor is still responsible for the debt and in prison and that led to many people passing themselves off as traders to become bankrupt.
There are several useful resources to use to find out more about insolvency and bankruptcy in the past.
One of the best places to start your search is within the pages of ‘The Gazette’. The London Gazette is described as the United Kingdom’s oldest continuously published newspaper and is the official newspaper of record for the United Kingdom. First published in 1665 in the reign of King Charles II, the newspaper published many insolvency and bankruptcy notices. Not necessarily the easiest search in the world, it is however free. Carry out a search and select one of the results to view the original page of the Gazette in a pdf format. You can then save it to your computer.
Local newspapers will carry the news of your ancestors insolvency, for a fee you can trawl the British Newspaper Archive (there is a free trial available)
Find out if any of your ancestors became bankrupt or insolvent by using the excellent National Archive guide .