Bankruptcy

==History==
{{Main|History of bankruptcy law}} {{seealso|History of debt relief}}
[[File:Het Groote Tafereel der Dwaasheid, Wie redeneeren wil is mis, men vind de Lapis by de gis.jpg|thumb|upright=0.8|Failure of [[John Law (economist)|John Law]]'s [[Mississippi Company]] led to French national bankruptcy in 1720.]]

In [[Ancient Greece]], bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants were forced into "[[debt slavery]]" until the creditor recouped losses through their [[Manual labour|physical labour]]. Many city-states in ancient Greece limited debt slavery to a period of five years; debt slaves had protection of life and limb, which regular slaves did not have. However, servants of the debtor could be retained beyond that deadline by the creditor and were often forced to serve their new lord for a lifetime, usually under significantly harsher conditions. An exception to this rule was [[Ancient Athens|Athens]], which by the [[Solonian constitution|laws of Solon]] forbade enslavement for debt; as a consequence, most Athenian slaves were foreigners (Greek or otherwise).

The [[Statute of Bankrupts Act 1542|Statute of Bankrupts]] of 1542 was the first statute under [[English law]] dealing with bankruptcy or [[insolvency]].<ref>{{Cite EB1911 |wstitle=Bankruptcy |first=Edward William Donoghue |last=Manson |volume=3 |page=322}}</ref> Bankruptcy is also documented in [[East Asia]]. According to [[al-Maqrizi]], the [[Yassa]] of [[Genghis Khan]] contained a provision that mandated the [[Capital punishment|death penalty]] for anyone who became bankrupt three times.

A failure of a nation to meet bond repayments has been seen on many occasions. In a similar way, [[Philip II of Spain]] had to declare four [[sovereign default|state bankruptcies]] in 1557, 1560, 1575 and 1596. According to Kenneth S. Rogoff, "Although the development of international capital markets was quite limited prior to 1800, we nevertheless catalog the various defaults of [[France]], [[Portugal]], [[Prussia]], [[Spain]], and the early Italian city-states. At the edge of Europe, Egypt, Russia, and Turkey have histories of chronic default as well."<ref>Carmen M. Reinhart, Kenneth S. Rogoff (2009). "[https://books.google.com/books?id=ak5fLB24ircC This time is different: eight centuries of financial folly]. {{Webarchive|url=https://web.archive.org/web/20160414003250/https://books.google.com/books?id=ak5fLB24ircC&pg=&dq=&dq&hl=en |date=2016-04-14 }}". Princeton University Press. p. 30. {{ISBN|0-691-14216-5}}.</ref>