State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from the stockholders to the bondholders. The New York Times Financial 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 with bankruptcy 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.


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 — bank·rupt·cy / baŋ ˌkrəp sē/ n pl cies 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 …   Law dictionary

  • Bankruptcy — Bank rupt*cy, n.; pl. {Bankruptcies}. 1. The state of being actually or legally bankrupt. [1913 Webster] 2. The act or process of becoming a bankrupt. [1913 Webster] 3. Complete loss; followed by of. [1913 Webster] …   The Collaborative International Dictionary of English

  • bankruptcy — 1700, from BANKRUPT (Cf. bankrupt), probably on the analogy of insolvency, but with t erroneously retained in spelling, instead of being merged in the suffix .... [OED]. Figurative use from 1761 …   Etymology dictionary

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  • bankruptcy — [baŋkrupt΄sē, baŋkrəp sē] n. pl. bankruptcies 1. the state or an instance of being bankrupt 2. complete failure; ruin …   English World dictionary

  • Bankruptcy — Notice of closure attached to the door of a computer store the day after its parent company declared bankruptcy (strictly, put into administration see text) in the United Kingdom. Bankruptcy is a legal status of an insolvent person or an… …   Wikipedia

  • bankruptcy — /bangk rupt see, reuhp see/, n., pl. bankruptcies. 1. the state of being or becoming bankrupt. 2. utter ruin, failure, depletion, or the like. [1690 1700; BANKRUPT + CY] * * * Status of a debtor who has been declared by judicial process to be… …   Universalium

  • 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 Legal status of a company unable to pay creditors.… …   Financial and business terms

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