# GLOSSARY

Finance Dictionary : Bankrupt

Bankrupt

KEYTAKEAWAYS

Explore the meaning of being bankrupt: a legal inability to pay debts, leading to asset evaluation, creditor repayment, and a fresh financial start.


CONTENT

DEFINITION

Bankrupt refers to the legal status of an individual or entity that is declared unable to repay their outstanding debts to creditors. This status is the result of a formal legal process, known as bankruptcy, which is initiated when the debtor is unable to meet their financial obligations.

 

Being bankrupt means that the debtor’s assets are evaluated and potentially liquidated to repay creditors, and certain legal protections are applied to prevent further legal actions by creditors.

 

The declaration of bankruptcy aims to provide a structured and equitable resolution for both the debtor and creditors, often leading to a discharge of remaining debts and a fresh financial start for the bankrupt individual or entity.

 

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