bankruptcy
Definition
Legal procedure for liquidating a business (or property owned by an individual) which cannot fully pay its debts out of its current assets. Bankruptcy can be brought upon itself by an insolvent debtor (called 'voluntary bankruptcy') or it can be forced on court orders issued on creditors' petition (called 'involuntary bankruptcy'). Two major objectives of a bankruptcy are (1) fair settlement of the legal claims of the creditors through an equitable distribution of debtor's assets, and (2) to provide the debtor an opportunity for fresh start. Bankruptcy amounts to a business-failure, but voluntary winding up does not. See also insolvency.
bankruptcy is in the Banking, Commerce & Finance and Corporate, Commercial, & General Law subjects.
bankruptcy appears in the definitions of the following terms:
protective trust,
order of discharge,
credit derivative (CD),
insolvency,
winding up,
Standard & Poor's Ratings,
asset deficiency,
Great Depression,
Chapter 7,
statement of affairs
and
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