Properly speaking, the Bankrupt Law is a thing of the past.

Laws have been enacted, however, in nearly all the States for the purpose of distributing the property of an insolvent debtor proportionately among his creditors and discharging the debtor from further liability. Proceedings may be instituted by the debtor himself or by a creditor. As a rule, proceedings in one State are not binding on a creditor residing in another State; but if Congress were to pass a national bankrupt law, this would annul all State laws on the subject, and proceedings under the national law would bind creditors in all the States and Territories.

Insolvency proceedings are generally commenced by a petition to the Judges of the court of insolvency, setting forth among other things the debtor's inability to pay all his debts in full, and his desire to surrender all his property for the benefit of his creditors.

If satisfied of the truth of matters alleged in the petition, the judge issues an order commanding the proper officer to take the debtor's property and hold it until a certain time, when the creditors meet and choose an assignee.

The assignee then takes charge of the property, turns it into money, and declares a dividend for the creditors.

Pending the proceedings, the debtor may be examined on oath for the purpose of making him disclose all matters concerning his property and the disposal thereof.

If the debtor has conformed to the insolvent law in all respects, he is entitled to a discharge from his debts, which is given him by the judge on the debtor's obtaining the requisite assent from the creditors.

In nearly all the States an insolvent debtor may, with the consent of his creditors, and in some States without such consent, assign all his property to a trustee for the benefit of his creditors, who converts it into money, dividing it pro rata among the creditors.