Definition of Bankruptcy

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TeachMeFinance.com



Bankruptcy -- a federal law Whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay.

another definition...

bankruptcy -- the legal process in which a person or firm declares inability to pay debts. Any available assets are liquidated and the proceeds are distributed to creditors. A person or firm may be declared bankrupt under one of several chapters of the federal bankruptcy code: Chapter 7, which covers liquidation of the doubter's assets; Chapter 11, which covers reorganization of bankrupt businesses; or Chapter 13, which covers work-outs of debts by individuals. Upon a court declaration of bankruptcy, a person or firm surrenders assets to a court-appointed trustee, and is relieved from the payment of previous debts.

another definition...

Bankruptcy -- The condition of a legal entity that does not have the financial means to pay their incurred debts as they come due. In the U.S. this status is established through legal procedures involving a petition by the bankrupt or by its creditors.




historic definition...

Bankruptcy -- The state of being bankrupt or insolvent; inability to meet obligations.


About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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