Bankruptcy is a legal status of an insolvent person or an organisation, that is, one who cannot repay the debts they owe to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor.
Bankruptcy is not the only legal status that an insolvent person or organisation may have, and the term bankruptcy is therefore not the same as insolvency. In some countries, including the United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings, for example, liquidation and administration are applied to companies. In the United States the term bankruptcy is applied more broadly to formal insolvency proceedings.
Read more about Bankruptcy: Etymology, History, Modern Law and Debt Restructuring, Fraud
Famous quotes containing the word bankruptcy:
“A woman’s whole life is a history of the affections. The heart is her world: it is there her ambition strives for empire; it is there her avarice seeks for hidden treasures. She sends forth her sympathies on adventure; she embarks her whole soul on the traffic of affection; and if shipwrecked, her case is hopeless—for it is a bankruptcy of the heart.”
—Washington Irving (1783–1859)
“The heritage of the American Revolution is forgotten, and the American government, for better and for worse, has entered into the heritage of Europe as though it were its patrimony—unaware, alas, of the fact that Europe’s declining power was preceded and accompanied by political bankruptcy, the bankruptcy of the nation-state and its concept of sovereignty.”
—Hannah Arendt (1906–1975)
“You must get your living by loving. But as it is said of the merchants that ninety-seven in a hundred fail, so the life of men generally, tried by this standard, is a failure, and bankruptcy may be surely prophesied.”
—Henry David Thoreau (1817–1862)