Definition
An archaic English legal term meaning bankrupt or insolvent — specifically, a person indebted beyond the means of payment. BANKEROUT is a variant spelling of the older English form of "bankrupt," used in early colonial and English law to describe a debtor whose liabilities exceeded the whole of his estate in goods and chattels. The term carried no technical distinction from the modern concept of insolvency; it described the condition of owing more than one could pay, particularly upon death.
Common Language
Modern common usage (Wiktionary): Not a current entry. The term is obsolete in ordinary English.
Historical common usage (Webster's 1913): Not separately defined. Webster's treated "bankrupt" as the standard form; "bankerout" had already passed out of common use by the nineteenth century.
Editorial note: Because BANKEROUT preceded the modern legal vocabulary of bankruptcy and insolvency, a researcher encountering it in historical sources should not read into it the technical procedural meanings that later attached to "bankrupt" — such as formal discharge, the distinction between voluntary and involuntary proceedings, or creditor priorities. The term denotes a condition, not a legal status conferred by court process.
Common Confusion
BANKEROUT is sometimes treated as a simple misspelling or clerical variant of BANKRUPT. It is better understood as the earlier English form of the same word, drawn from the same etymological root but used before the term "bankrupt" had been regularized in spelling and before English and American law had developed a formal statutory bankruptcy regime. Researchers should not conflate the informal, condition-based meaning of BANKEROUT with the procedural and statutory meaning of BANKRUPT as it exists today.
Why It Matters in Research
BANKEROUT is a marker term for the early colonial period. Its appearance signals that a document predates organized Anglo-American bankruptcy law and that the drafter was working without a statutory framework for debt relief or creditor priority. Researchers working in colonial records — particularly New England colony laws, probate inventories, and early assembly proceedings — will encounter this term precisely where modern bankruptcy vocabulary has not yet taken hold.
The Plymouth Colony Laws usage documented by Burrill is the most instructive specimen: the term appears in the context of intestate estates where debts exceed assets, not in any process resembling a modern bankruptcy petition. This tells the researcher two things. First, the colony's concern was distributional — how to allocate insufficient assets among creditors — rather than rehabilitative. Second, no discharge of the decedent's debts in the modern sense was contemplated; the term simply identified the triggering condition for a priority-of-payment rule.
When searching Law Mind corpus materials for early American debt law, BANKEROUT should be treated as a search term alongside INSOLVENT, INSOLVENCY, and the early uses of BANKRUPT, all of which may appear in the same documentary period referring to substantially the same condition. Variant spellings (bankerupt, banke-rout, bancarout) appear in sources of the same era and should be anticipated in manuscript and transcribed sources. The French-influenced spellings reflect the word's path through continental mercantile usage before its English settlement.
Researchers should also be alert to the fact that none of the three historical dictionary sources in the Law Mind shelf expand on BANKEROUT beyond a cross-reference to BANKRUPT and the single Burrill citation. This scarcity is itself informative: by the time major legal dictionaries were compiled, the term had become a historical curiosity rather than an active legal word.
Historical Dictionary Support
All three shelf sources — Black's (1st ed.), Black's (2nd ed.), and Burrill's — agree on the definition: bankrupt; insolvent; indebted beyond the means of payment. There is no divergence among them on substance.
Burrill's is the most useful of the three. It alone provides documentary evidence of the term in use, quoting directly from the Plymouth Colony Laws (ed. 1836), p. 3, recording usage from 1633. The passage Burrill excerpts is notable for pairing a general description of dying more indebted than one's estate of goods and chattels with the specific term "bankerout," confirming that the term functioned descriptively rather than as a term of art triggering specific procedural consequences.
Black's (both editions) gives only the cross-reference definition without illustration. Neither edition attempts to trace the word's history or distinguish it from the contemporary meaning of bankrupt. This is consistent with the dictionaries' general treatment of obsolete forms — they record but do not elaborate.
What the historical sources collectively miss: none addresses the distinction between the condition-based colonial usage and the status-based statutory usage that would develop with English bankruptcy legislation and, later, American federal bankruptcy law. A researcher relying solely on dictionary definitions would not understand why this distinction matters for reading early sources accurately.
Jurisdictional Note
BANKEROUT appears primarily in early New England colonial records. Its use was not uniform across the colonies, and it had largely disappeared from legal drafting well before the first federal Bankruptcy Act of 1800. It is not a term of current law in any American jurisdiction.