Simple Definition of bankruptcy
: the condition of being bankrupt : a condition of financial failure caused by not having the money that you need to pay your debts
: an occurrence in which a person, business, etc., goes bankrupt
: the condition of completely lacking a good or desired quality
Full Definition of bankruptcy
1 : the quality or state of being bankrupt
2 : utter failure or impoverishment
Examples of bankruptcy in a sentence
The company is facing bankruptcy.
The company was forced into bankruptcy.
The number of bankruptcies was especially high last year.
Critics view the decision as an example of moral bankruptcy on the part of the administration.
First Known Use of bankruptcy
BANKRUPTCY Defined for Kids
Definition of bankruptcy for Students
: the state of not having enough money to pay debts <The company faces bankruptcy.>
Legal Definition of bankruptcy
1 : the quality or state of a bankrupt <filed for bankruptcy>
2 : the administration of an insolvent debtor's property by the court for the benefit of the debtor's creditors <the debt was discharged in bankruptcy> <bankruptcy proceedings> — see also adequate protection, Bankruptcy Code — compare insolvency, receivership
Additional Notes on bankruptcy
Bankruptcy protects the debtor from debt collection by creditors. A debtor may file for bankruptcy, which is called “voluntary bankruptcy,” or a creditor may petition the court to declare the debtor bankrupt, which is called “involuntary bankruptcy.” Involuntary bankruptcy is allowed only under chapter 7 or chapter 11 of the U.S. Bankruptcy Code. There are four types of relief available to individuals or corporations under the Bankruptcy Code: liquidation (chapter 7), reorganization (chapter 11), debt adjustment for a family farmer or fisherman (chapter 12), and debt adjustment for an individual with a regular income (chapter 13). Municipalities may file for bankruptcy under chapter 9. The court determines which debts are to be repaid according to their priority, and the debtor is typically granted a discharge from unpaid debts that are dischargeable under the Bankruptcy Code.
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