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.

Use bankruptcy in a sentence

Related Videos




http://www.businessdictionary.com/definition/bankruptcy.html

Have a question about bankruptcy? Ask for help in the
Community
advertise here

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z