When a Florentine money dealer could not pay, his bench was broken in half.
The English word "bankrupt" entered the language in the 1560s from the Italian banca rotta, meaning "broken bench."1 In medieval Italian trading cities, money changers worked at benches or tables set up in public spaces. When a dealer became insolvent, the customary response was to break his bench, signaling that he was finished.
The Italian rotta came from the verb rompere, to break, itself from the Latin rumpere, the same root that gives English "rupture."2 As the word moved into English, the ending was reshaped by association with Latin rupta, producing the "-rupt" spelling that connects it visually to "corrupt," "disrupt," and "interrupt."
The French intermediary was banqueroute, which preserved the "broken" sense more directly.3 English absorbed both the Italian and French forms before settling on "bankrupt" by the late sixteenth century. Dr. Samuel Johnson repeated the legend of the broken bench in his 1755 Dictionary of the English Language.4
Ancient societies handled insolvency differently. In Athenian Greece, a debtor who could not pay was forced into debt slavery along with his wife and family, sometimes for life.5
English bankruptcy law evolved through centuries of legislation. The Statute of Anne in 1706 introduced the concept of discharge, allowing a debtor who surrendered all property to be freed from existing obligations and begin again.6 This principle, that a person could fail financially and start over, had no precedent in ancient law.
The modern U.S. Bankruptcy Code was adopted in 1978, replacing a patchwork of earlier statutes.7 The same Italian bench that gave English the word "banker" also gave it the word for the banker's ruin.