Bankruptcy


Bankruptcy
A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.

Bankruptcy offers an individual or business a chance to start fresh by forgiving debts that simply can't be paid while offering creditors a chance to obtain some measure of repayment based on what assets are available. In theory, the ability to file for bankruptcy can benefit an overall economy by giving persons and businesses another chance and providing creditors with a measure of debt repayment.

Bankruptcy filings in the United States can fall under one of several chapters of the Bankruptcy Code, such as Chapter 7 (which involves liquidation of assets), Chapter 11 (company or individual "reorganizations") and Chapter 13 (debt repayment with lowered debt covenants or payment plans). Bankruptcy filing specifications vary widely among different countries, leading to higher and lower filing rates depending on how easily a person or company can complete the process.


Investment dictionary. . 2012.

Synonyms:

Look at other dictionaries:

  • bankruptcy — also failure and insolvency a legal procedure for dealing with debt problems of individuals and business. A non technical term for a legal state of insolvency (Glossary of Common Bankruptcy Terms) A legal procedure for dealing with debt problems… …   Glossary of Bankruptcy

  • bankruptcy — bank·rupt·cy / baŋ ˌkrəp sē/ n pl cies 1: the quality or state of a bankrupt filed for bankruptcy 2: the administration of an insolvent debtor s property by the court for the benefit of the debtor s creditors the debt was discharged in bankruptcy …   Law dictionary

  • Bankruptcy — Bank rupt*cy, n.; pl. {Bankruptcies}. 1. The state of being actually or legally bankrupt. [1913 Webster] 2. The act or process of becoming a bankrupt. [1913 Webster] 3. Complete loss; followed by of. [1913 Webster] …   The Collaborative International Dictionary of English

  • bankruptcy — 1700, from BANKRUPT (Cf. bankrupt), probably on the analogy of insolvency, but with t erroneously retained in spelling, instead of being merged in the suffix .... [OED]. Figurative use from 1761 …   Etymology dictionary

  • bankruptcy — [n] inability to pay debts Chapter 11*, defalcation, default, destituteness, destitution, disaster, exhaustion, failure, indebtedness, indigence, insolvency, lack, liquidation, loss, nonpayment, overdraft, pauperism, privation, repudiation, ruin …   New thesaurus

  • bankruptcy — [baŋkrupt΄sē, baŋkrəp sē] n. pl. bankruptcies 1. the state or an instance of being bankrupt 2. complete failure; ruin …   English World dictionary

  • Bankruptcy — Notice of closure attached to the door of a computer store the day after its parent company declared bankruptcy (strictly, put into administration see text) in the United Kingdom. Bankruptcy is a legal status of an insolvent person or an… …   Wikipedia

  • bankruptcy — /bangk rupt see, reuhp see/, n., pl. bankruptcies. 1. the state of being or becoming bankrupt. 2. utter ruin, failure, depletion, or the like. [1690 1700; BANKRUPT + CY] * * * Status of a debtor who has been declared by judicial process to be… …   Universalium

  • Bankruptcy — State of being unable to pay debts. Thus, the ownership of the firm s assets is transferred from the stockholders to the bondholders. The New York Times Financial Glossary * * * bankruptcy bank‧rupt‧cy [ˈbæŋkrʌptsi] noun bankruptcies PLURALFORM… …   Financial and business terms

  • bankruptcy — Inability to pay debts. In bankruptcy of a publicly owned entity, the ownership of the firm s assets is transferred from the stockholders to the bondholders. Bloomberg Financial Dictionary Legal status of a company unable to pay creditors.… …   Financial and business terms


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.