bankruptcy Hear it!

bankruptcy Definition

bank·ruptcy (-rupt′sē, -rəp sē)

noun pl. -·cies

  1. the state or an instance of being bankrupt
  2. complete failure; ruin

bankruptcy Synonyms

bankruptcy

n.

insolvency, failure, financial loss or ruin, nonpayment, defaulting, repudiation, overdraft, defalcation, liquidation, chapter 11, economic death, pauperism, destitution, indigence, privation, distress, straitened circumstances, beggary, impecuniosity, ruin, ruination, going to the wall*.

Antonyms solvency, prosperity*, soundness.

bankruptcy Finance Definition
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.

bankruptcy Law Definition

n

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.
Chapter 7 bankruptcy
. 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.
Chapter 11 bankruptcy
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.
Chapter 12 bankruptcy
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.
Chapter 13 bankruptcy
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.
involuntary bankruptcy
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.
voluntary bankruptcy
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.
bankruptcy Usage Examples

Converse of object

  • declare: Have you been looking for a way to start over without declaring bankruptcy?
  • avoid: To avoid bankruptcy there are a number of things you can do.
  • face: Two Case Studies Mr D was facing bankruptcy by the Inland Revenue for a sum of nearly £ 80,000.
  • suffer: The problem with this type of working arrangement is that partners might leave or suffer bankruptcy.
  • consider: I am in severe financial debt due to her borrowings and I am now considering bankruptcy as we are sinking.

Adjective modifier

  • impending: When he turns on his wife and children in impotent rage at his impending bankruptcy, it's quite frightening.
  • utter: The third thing is the utter bankruptcy of the Laodicean Church.
  • moral: And the problem with lying about dead civilians is that its a sure sign of moral bankruptcy.
  • spiritual: Only those who admit their spiritual bankruptcy and sinfulness can enter the Kingdom.
  • subsequent: His subsequent bankruptcy evidently contributed to the closure of the then Lappal Tunnel Brickworks less than two years later.
  • personal: Personal bankruptcy allowed asked to estimate they failed to a patient's health.

Modifies a noun

  • petition: Details of pending or current bankruptcy petitions or orders against the stated person.
  • proceeding: The Council began a trial of using bankruptcy proceedings in January 2005.
  • restriction: Bankruptcy restrictions orders are provided for in Schedule 4A to the Insolvency Act 1986.
  • order: Once the scheme trustees have been notified of the bankruptcy order, they should contact the official receiver with further details of the scheme.
  • attorney: Atlanta Bankruptcy Lawyers Choosing a bankruptcy attorney in Atlanta is a very important.. .
  • filing: It doesn't take the banking industry long to notice that bankruptcy filings in the northern part of Texas are suddenly burgeoning.

Noun used with modifier

  • filing: Bad Credit Loans & Credit Cards Resource for bad credit loans, credit cards, credit repair, debt consolidation, and filing bankruptcy.

Possessives

  • father: But it then pleased God to alter my prospects in life through my father's bankruptcy.

Preposition: of

  • partner: The PVA must be contrasted with the likely outcome for Creditors in a liquidation and the bankruptcy of the partners.
bankruptcy Quotes

Capitalism without bankruptcy is like Christianity without hell.

—Borman, Frank