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If someone tears all your property it'll lead to bankruptcy. With all your property torn, you're going to go bankrupt. What mean person did that?
This is a jukugo word that uses the on'yomi readings of the kanji. You should be able to read this on your own.
彼の祖父は江戸時代の破産した百姓だという噂だ。
It’s rumored that his grandfather was a bankrupt farmer of the Edo period.
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