Bankruptcy

Definition of Bankruptcy

  1. The financial status of an individual or firm that has been legally judged either to have debts that exceed assets or to be unable to pay bills. The individual or firm can declare bankruptcy voluntarily or be pressed by creditors to do so. The debtor's remaining property and assets are then administered for the creditors or distributed among them.

Synonyms

  • default
  • loss
  • exhaustion
  • overdrawn
  • nonpayment

Acronyms

  • BK

Related Terms and Acronyms

  • Non-dischargeable Debt Definition,
    • Debt that cannot be eliminated in bankruptcy such as Federal taxes.
  • Impaired Insurer Definition,
    • An insurance company that is financially insolvent or illiquid and in risk of being unable to pay insurance claims.
  • Tax Sale Definition,
    • A government sale of property to recover unpaid taxes.
  • Liquidation Definition,
    • To settle the outstanding debts by selling property.
    • The practice of selling or redistributing some or all of a business's assets in order to repay debts or pay investors if the business becomes insolvent or is sold in full or in part.
    • To convert into cash.
  • Collection Definition,
    • The efforts used to bring an overdue mortgage, or other debt current, and the filing of necessary notices to proceed with foreclosure when necessary.
  • Repossession Definition,
    • The taking back of property after a borrower has stopped making payments.
  • Repayment Plan Definition,
    • Modification of an existing loan after the borrower has been delinquent. Often used when the borrower misses payments but the lender does not foreclose.
  • Fresh Start Definition,
    • The characterization of a debtor's status after bankruptcy. i.e., free of most debts.
  • Consumer Bankruptcy Definition,
    • A bankruptcy case filed to reduce or eliminate debts that are primarily consumer debts.
  • Foreclosure Definition,
    • The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
  • Receivership Definition,
    • A form of bankruptcy where a person is appointed to take control of a company and is responsible for recouping unpaid debts.
  • Fiduciary Definition,
    • An individual, company, or association that manages assets for another party. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy, and those responsible for managing the finances of a minor.
  • Solvency Definition,
    • To be able to meet one's financial liabilities in the short or long term.
  • Refinance Definition,
    • To arrange a new loan for an increased amount or better terms whereby the old loan is paid off from the proceeds of the new loan.
  • Secured Credit Card Definition,
    • A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.
  • Debtor Definition,
    • A person who has filed a petition for relief under the bankruptcy laws.
    • Anyone who owes money to a creditor.
  • Forbearance Definition,
    • Delaying foreclosure, usually because the borrower has arranged to pay the amount in arrears.
  • Cash Collateral Definition,
    • The proceeds of cash collected from the sale of liquid assets while in bankruptcy.
  • Fiduciary Duty Definition,
    • A requirement that someone in a position of trust, such as a banker, real-estate agent, or title agent, must act in good faith and trust on behalf of a client.
  • Asset Case Definition,
    • A bankruptcy proceeding where there are non-exempt assets that might be accessible to pay creditor's claims.
  • Bankruptcy Trustee Definition,
    • A private individual or corporation appointed to undertake bankruptcy proceedings for a individual or corporation.
  • Probate Sale Definition,
    • Sale of property after the death of the owner, supervised by a court, with proceeds divided among creditors and heirs.
  • Forfeiture Definition,
    • Loss of property because of violation of law or contract.
  • Business Bankruptcy Definition,
    • A bankruptcy case in which the debtor is a business or an individual involved in business and the debts are for business purposes.
Compare. Calculate. Apply today.
Compare Mortgage RatesMortgage CalculatorsApply for a Mortgage