Bankruptcy meaning

băngkrəpt-sē, -rəp-sē
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The definition of bankruptcy means the state of not having enough money or assets to pay all debts.

An example of bankruptcy is what an individual declares in court to settle outstanding debts and start fresh financially.

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The state or an instance of being bankrupt.
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Complete failure; ruin.
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A legal proceeding that allows for a person or entity to be declared bankrupt.
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A legal proceeding initiated by an individual or company that is unable to pay its debts. A bankruptcy can either liquidate the debts or attempt to develop a reorganization plan under which the debt, or some of it, will be paid. The most common type of bankruptcy filing is Chapter 11, in which a business is allowed to continue running while it reorganizes its debts. Creditors are prevented from attempting to collect debts from a company that is in a Chapter 11 bankruptcy proceeding. In a Chapter 11, the debtor and creditors meet to draw up an agreement for repaying some of the debt. Some companies close down through a Chapter 7 bankruptcy (also called a liquidation), instead of attempting to reorganize. In a Chapter 7 bankruptcy, a court-appointed interim trustee is given discretion to make management changes, arrange unsecured financing, and wind down the business. Individuals who want to get rid of their debt and not attempt to pay anything back file for Chapter 7 bankruptcy. Individuals who want to reorganize their debts and pay back a portion file for a Chapter 13 bankruptcy. Typically, people who make this type of filing pay something each month for several years to the bankruptcy court, which distributes the funds to the creditors. When the payments are completed, the debtor’s debts are discharged. Chapter 13 bankruptcies allow individuals to hold onto more assets than Chapter 7 bankruptcies do. Bankruptcies fall into two categories. A voluntary bankruptcy occurs when the debtor petitions the court to begin a bankruptcy proceeding. An involuntary bankruptcy occurs when the creditors petition the court to put the debtor into bankruptcy. The term chapter refers to the chapter of the bankruptcy law where the provisions are outlined.
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A federal judicial procedure by which most debts owed by a person or entity are extinguished or reduced or the payment of which are delayed.
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. A bankruptcy proceeding whereby most of the debtor’s assets are collected and sold, the proceeds are distributed among the creditors, and the debtor’s liabilities are discharged. Also called a straight bankruptcy.
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A bankruptcy proceeding whereby a debtor, usually a business, is allowed to reorganize itself and restructure its finances under court supervision and to arrange and carry out a court-approved repayment plan with its creditors while continuing to operate its business. Also called reorganization.
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A bankruptcy proceeding whereby a farmer with a regular income who is insolvent can keep and continue operating his farm while arranging and carrying out, under court supervision, a repayment plan with his creditors.
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A bankruptcy proceeding whereby a person with a regular income is allowed to propose a plan to reduce her obligations or extend the period to pay those obligations and allow her future earnings to be collected by a trustee and paid to the debtor’s unsecured creditors. Also called rehabilitation.
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A bankruptcy proceeding initiated by a creditor to legally declare a debtor to be bankrupt and to impound all of the debtor’s non-exempt property, distribute it or its proceeds to the creditors, and extinguish the debtor’s liability.
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A bankruptcy proceeding voluntarily initiated by a debtor who files a petition with the bankruptcy court to be legally declared a bankrupt and, during the proceeding, surrenders his property in order to discharge his debts.
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A legally declared or recognized condition of insolvency of a person or organization.
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The state of being bankrupt.
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The system of adjudication that declares instances of bankruptcy.

Went into bankruptcy.

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Origin of bankruptcy