Purpose

• The Bankruptcy Act of 1914 was meant to improve upon an earlier law, the Bankruptcy Act of 1883. The earlier Act did not address the administration of the estate of a bankrupt person. As a result, most estates were privately managed, and rules regarding how to manage the estate differed greatly. In addition, there were no safeguards either for the general public or the person whose estate was being managed, so that an administrator could easily take money for himself, accept bribes in exchange for allowing the bankrupt person to make new purchases or engage in other dishonest activities.
  
  

Scope

• The Bankruptcy Act of 1914 did not make any significant changes to existing laws. Instead, it set up provisions for dealing with misconduct. Most significantly, this act required the debtor to apply for bankruptcy in a public court, so that members of the general public could hear details about his financial situation and be aware that he was applying for bankruptcy. For the first time, the court had to publicly examine the debtor and approve his bankruptcy.
  
  

Attitude Towards Bankruptcy

• According to the Insolvency Service, The Bankruptcy Act of 1914 solidified the public's attitude towards men who filed for bankruptcy. During this period, people believed that a man who filed for bankruptcy had gotten into financial trouble because he was irresponsible or untrustworthy. Thus, the Bankruptcy Act of 1914 limited these men's abilities to participate in society. Most notably, a debtor could be arrested if his creditors showed probable cause to believe that he was about to leave England for the purpose of escaping from his debts.
  
  

Discharges and the 1914 Act

• Discharges of bankruptcy were uncommon under the 1914 Bankruptcy Act. To get his debts discharged, a man had to reappear in court and demonstrate that he had repaid all debts. According to the Insolvency Service, most bankrupt men did not want to return to court and have their finances examined in public again. Under this law, the bankrupt person could be disqualified from discharge if he continued to engage in financial trades after the bankruptcy or engaged in behavior the court considered rash or speculative. A bankrupt man had the right to apply for a discharge without misconduct; however, these were rarely granted because he had to prove that his bankruptcy occurred completely due to bad luck.
  
  

Revision of the 1914 Act

• The British Parliament revised the 1914 Bankruptcy Act in 1976. Most notably, the new act provided automatic discharges of bankruptcy after five years if the court deemed automatic discharge appropriate. The bankrupt person could apply for a discharge before that time, but would have to prove that the discharge was warranted, such as showing that she had repaid her debts and had not incurred any new debts.