Bankruptcy is when a person or business legally states that they can't pay back their debts.

Bankruptcy is a formal process where an individual or company admits legally that they are unable to pay their debts. This process involves legal proceedings where assets may be used to pay off debts, and certain legal protections are put in place. It's often seen as a last resort and can have significant financial and legal implications. Bankruptcy laws are designed to provide a way out for those overwhelmed by debt, while also protecting creditors to some extent.

Blue icon lightbulb

Explore more terms

Whether you're looking for definitions of other related terms or just browsing, our full list offers a wealth of information at your fingertips.

Back to Glossary