bankruptcy

bankruptcy
Inability to pay debts. In bankruptcy of a publicly owned entity, the ownership of the firm's assets is transferred from the stockholders to the bondholders. Bloomberg Financial Dictionary
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Legal status of a company unable to pay creditors. Bankruptcy usually involves a formal court ruling. Securities issued by this company risk losing all of their value. Euroclear Clearing and Settlement glossary

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bankruptcy bank‧rupt‧cy [ˈbæŋkrʌptsi] noun bankruptcies PLURALFORM [countable, uncountable]
LAW when someone is judged to be unable to pay their debts by a court of law, and their assets are shared among the people and businesses that they owe money to:

• Many state-operated companies had experienced difficulties and some had faced bankruptcy.

• The number of bankruptcies in the first half of the year soared by 60%.

word focus - bankruptcy
Bankruptcy in the UK
When a person or a company does not have enough money or assets to pay their debts, they are insolvent. Informally, both an individual or a company can be described as bankrupt. In a strict legal sense, however, it can only be used to describe people, not companies in the UK. Administration is when a failing company is reorganized by an independent specialist with the aim of continuing some of its activities and avoiding liquidation (= a situation in which a company stops operating and its assets are sold to pay its debts ) . Receivership is when a company that does not have enough money to pay its debts is put under the control of a receiver (= someone who is chosen by a court of law to be in charge of a bankrupt company ) who sells the company's assets in order to pay creditors (= people or companies who are owed money ) and closes the company.
Bankruptcy in the US
In the US, bankrupt can be used as an informal or strict legal term to describe individuals or companies. The set of laws dealing withbankruptcy is the Bankruptcy Code. Two parts of the law that deal with the process by which companies officially become bankrupt are Chapter 11 and Chapter 7. Chapter 11 gives failing companies a period of time to reorganize, after which they must pay their creditors. Chapter 7 deals with the process of a bankrupt company going into liquidation.
ˌact of ˈbankruptcy acts of bankruptcy PLURALFORM [countable] LAW
when someone does something which breaks a condition made by the court when they were declared bankrupt
ˌdischarge from ˈbankruptcy discharges from bankruptcy PLURALFORM [countable, uncountable] LAW
when the court decides that someone who has been declared bankrupt in the past has obeyed the orders of the court and can do business again
inˌvoluntary ˈbankruptcy [countable, uncountable] LAW
when someone's creditor S (= people or companies who are owed money) ask the court to make the person bankrupt
trusˌtee in ˈbankruptcy trustees in bankruptcy PLURALFORM [countable] LAW
someone who is given the power to take control of a bankrupt business's property, to sell it, and to divide the money made from the sale between the people that the bankrupt company owes money to
ˌvoluntary ˈbankruptcy [countable, uncountable] LAW
when someone asks the court to make them bankrupt

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   A court proceeding in which the assets of an insolvent company or individual are liquidated.
   ► See also Insolvent, Solvent.

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bankruptcy UK US /ˈbæŋkrəptsi/ noun [C or U] (plural bankruptcies)
LAW, FINANCE a situation in which a business or a person becomes unable to pay their debts, and is officially bankrupt: be on the brink/verge of bankruptcy »

The country's largest automaker is rumored to be on the brink of bankruptcy.

declare/file for bankruptcy »

Now he's $37,000 in debt and plans to file for bankruptcy.

»

The company was forced into bankruptcy.

»

The toll of bankruptcies was rising daily.

See also ACT OF BANKRUPTCY(Cf. ↑act of bankruptcy), CHAPTER 11(Cf. ↑Chapter 11), DISCHARGE IN BANKRUPTCY(Cf. ↑discharge in bankruptcy), INVOLUNTARY BANKRUPTCY(Cf. ↑involuntary bankruptcy), VOLUNTARY BANKRUPTCY(Cf. ↑voluntary bankruptcy)

Financial and business terms. 2012.

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Look at other dictionaries:

  • bankruptcy — also failure and insolvency a legal procedure for dealing with debt problems of individuals and business. A non technical term for a legal state of insolvency (Glossary of Common Bankruptcy Terms) A legal procedure for dealing with debt problems… …   Glossary of Bankruptcy

  • Bankruptcy Code — the name given to the statutory body of bankruptcy laws after the Bankruptcy Reform Act of 1978 (Glossary of Common Bankruptcy Terms) The common name given to title 11 of the United States Code. The Bankruptcy Code is a set of federal statutes… …   Glossary of Bankruptcy

  • bankruptcy court — the federal tribunal where cases under the Bankruptcy Code are litigated (Glossary of Common Bankruptcy Terms) A federal court where cases under the Bankruptcy Code are litigated. The Bankruptcy Court is a unit of the United States District Court …   Glossary of Bankruptcy

  • bankruptcy petition — the document filed with the court to initiate a bankruptcy proceeding (Glossary of Common Bankruptcy Terms) A formal request for the protection of the federal bankruptcy laws. (There is an official form for bankruptcy petitions.)… …   Glossary of Bankruptcy

  • bankruptcy rules — Also known as the Federal Rules of Bankruptcy Procedure. These rules govern the procedures in bankruptcy and adversary cases. In addition to these rules, each court normally is governed by its own local rules that supplement the Bankruptcy Rules …   Glossary of Bankruptcy

  • bankruptcy estate — all legal or equitable interests of the debtor in property at the time of the bankruptcy filing. The estate includes all property in which the debtor has an interest, even if it is owned or held by another person (Glossary of Common Bankruptcy… …   Glossary of Bankruptcy

  • bankruptcy sale — A free and clear sale of debtor s real estate or personal property conducted by the bankruptcy court through the trustee in order to obtain proceeds for distribution to creditors of the bankruptcy estate. (Bernstein s Dictionary of Bankruptcy… …   Glossary of Bankruptcy

  • Bankruptcy Reform Act of 1994 — the most comprehensive piece of bankruptcy legislation since the Bankruptcy Reform Act of 1978; signed into law on October 22, 1994 with most provisions effective immediately; included in the 1994 Act are: provisions to expedite bankruptcy… …   Glossary of Bankruptcy

  • Bankruptcy Reform Act of 1978 — the first substantive bankruptcy code revision since the Chandler Act of 1938. It took effect on October 1, 1979 and some of the major elements of this act were as follows: upgrading the jurisdiction of the U.S. bankruptcy courts to deal with… …   Glossary of Bankruptcy

  • Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 — Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 This legislation primarily affects consumer filings, making it more difficult for a person or estate to file for Chapter 7 bankruptcy. The BAPCPA impacts business filers as… …   Glossary of Bankruptcy

  • Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 — This legislation primarily affects consumer filings, making it more difficult for a person or estate to file for Chapter 7 bankruptcy. The BAPCPA impacts business filers as well with the heaviest impact on smaller (those listing less than $2… …   Glossary of Bankruptcy

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