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LSDefine
Simple English definitions for legal terms
cessionary bankrupt
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A quick definition of cessionary bankrupt:
A cessionary bankrupt is someone who owes so much money that they cannot pay it back. This person has to give up all their property so that it can be divided among the people they owe money to. This term is not used very often anymore, but it means the same thing as someone who files for Chapter 7 bankruptcy.
A more thorough explanation:
Definition: A cessionary bankrupt is a person who forfeits all their property so that it can be divided among their creditors. This term is no longer used in modern bankruptcy laws, but it was used until 1979.
Example: In the past, if someone owed a lot of money to different people and couldn't pay it back, they could declare themselves a cessionary bankrupt. This meant that they would give up all their property, and it would be sold to pay off their debts. For example, if someone owed $100,000 to different creditors and only had a house worth $50,000, they would have to give up their house to be sold and the money would be divided among their creditors.
This example illustrates how a cessionary bankrupt would forfeit all their property to pay off their debts. It also shows how this term is no longer used in modern bankruptcy laws, which now use the term "debtor" instead.