Daniel Defoe: bankrupt and bankruptcy reformer

The first English bankruptcy statute arose in 1542 during the reign of Henry VIII. Throughout the early history of English bankruptcy law bankrupts were perceived as evasive at best and fraudulent at worst. The legislation contained severe penalties and, until 1705, did not provide for discharge from bankruptcy. The introduction of discharge resulted from a number of factors including pressure from traders who had suffered financially as a result of overseas war and had lost confidence in a bankruptcy regime which did little to encourage debtors to enter a compromise or to disclose their assets. There was also a growing concern at the excessive indulgences of several bankrupts, particularly Thomas Pitkin, who had amassed substantial losses. The principle proponent of the introduction of discharge and the most consistent and outspoken reformer of the bankruptcy laws of the late seventeenth and early eighteenth century was novelist, and trader, Daniel Defoe, himself an undischarged bankrupt. The introduction of discharge was an important turning point in the history of bankruptcy law and the role played by Defoe was critical. Defoe criticized a system that failed to reward the honest bankrupt or provide an incentive for disclosure of assets. This article looks at the development of Defoe's campaign for the introduction of discharge including an examination of his background and business ventures, his own bankruptcy, and his ongoing commentary, firstly, in An Essay upon Projects and thereafter in his influential newspaper A Review of the State of the English Nation.