Basics on bankruptcy
Background
If an ancestor experienced financial difficulties and was declared bankrupt, the surviving records can be very useful for family history research. In New South Wales, records of those in financial distress prior to 1887 are referred to as records of insolvency, after which time they are records of bankruptcy. While there are some legal differences between the two terms, the records they produce are similar.
Prior to 1842, it was possible for a person to be imprisoned for debt and a search of gaol records may be worthwhile. Carters Barracks and Sydney Gaol (Darlinghurst) were the main gaols in which debtors were imprisoned and any surviving records for those institutions will be found at State Records. By 1842, however, financial distress had become so common in the colony due to widespread drought and economic downturn that it became necessary to suspend imprisonment for debt to prevent overcrowding and in the following year imprisonment for debt was legally abolished.
Indexes and the records
The introduction of the Insolvency Act in 1842 produced a series of papers which survive today, and which altered little in content for the remainder of the nineteenth century. The Insolvency Files (1842-1887) and the later Bankruptcy Files (1888-1929) provide the bulk of data of interest to genealogists.
Both series of records are indexed alphabetically by name on microfilm and the SAG holds these reels (SAG reels 3281 & 3282). In addition, there is an online index to the Insolvency Files, 1842-87 on the State Records website.
The records can include a schedule of debts owing, together with a list of assets held which could be sold and converted to cash to cover those debts. Creditors might number only one or two, or in the case of a businessmen who traded widely in the colony, might be recorded over a number of pages. Some personal details of the insolvent are usually given, with most files detailing occupation, abode (sometimes only town or locality), and usually a brief statement as to why financial difficulty had been encountered. The list of assets held by the debtor is of most social value as it sometimes contains an inventory of household furniture and other possessions which could be sold to meet expenses.
The value of bankruptcy records from a local history point of view must also be stressed. The economic highs and lows of a community can be documented according to the number of local business people or farmers who are declared bankrupt. The alphabetical index, which is available in two sections (1842-1887 and 1888-1928), provide not only name, date and occupation but also location of the bankrupt, making the task of extracting files for a specific area, or indeed a specific occupation, reasonably easy.
The files themselves have not been copied and are available for reading in original format only at the Western Sydney (Kingswood) Records Centre of State Records.
After 1924 the responsibility for bankruptcy was transferred from the State to the Commonwealth authorities and hence after that date records of bankruptcy are retained by the National Archives of Australia.
Further reading
Garnsey, Heather: Going for Broke, Using NSW Bankruptcy Records 1842-1948, from Gold to Federation, Papers from the Fourth Victorian State Family History Conference, ed. by Noelle Oke, Albury 2001, pp 60-62.