|
|
Bankruptcy
The state of being unable to pay debts as they are or come due as regulated by bankruptcy laws. Straight bankruptcy (chapter 9) deals with the condition of insolvency in which the court provides for assets to be distributed to creditors. Debtor rehabilitation provisions (under chapter 11 and 13) of the Bankruptcy Act provide for rehabilitation and reorganization in which creditors look to future earnings of the bankrupt to satisfy claims.
Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. A declared state of bankruptcy can be requested by creditors in an effort to recoup a portion of what they are owed; however, in the overwhelming majority of cases, the bankruptcy is initiated by the bankrupt individual or organization.
« Back
|
|
|