Business Bankruptcy

Definition of Business Bankruptcy

  1. This type of bankruptcy occurs when business related debts cannot be paid and the business or individual defaults or files for bankruptcy. The debtor can be a business or an individual involved in a business.

Synonyms

  • Chapter 11
  • default
  • liquidation
  • loss
  • nonpayment

Related Terms and Acronyms

  • Small- and Medium-sized Enterprises (SMEs) Abbreviation,
    • Limits banks place on businesses to determine there size.
    A term widely used by the World Bank and the World Trade Organization (WTO).
  • Business (busn) Abbreviation,
    • Economic activities of a given type.
    • A company, either for-profit or non-profit.
    • Commercial, industrial or professional activities undertaken by an entity.
  • Non-dischargeable Debt Definition,
    • Debt that cannot be eliminated in bankruptcy such as Federal taxes.
  • Debtor Definition,
    • A person who has filed a petition for relief under the bankruptcy laws.
    • Anyone who owes money to a creditor.
  • Bankruptcy (BK) Acronym, Important,
    • A court action under the Federal Bankruptcy Code by which a debtor's debts may be discharged, usually by transferring assets to a trustee, or rescheduled.
  • 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.
  • Self Employed Person (SEP) Acronym,
    • A person who runs a trade or business, rather than working as an employee for someone else. You are self-employed if you are a sole proprietor or a partner working in a business. You can be an employee and self-employed at the same time if you have an independent business outside your regular employee hours. To qualify for many business tax exclusions and deductions, the enterprise must make a profit in three of five years. In most cases in order to qualify you must take and average of the last 2-3 years tax assessments.
  • Bad Debt Definition,
    • Money that cannot be collected is considered bad debt. Businesses can deduct bad debts under certain circumstances. If a bad debt is personal, it can also be deducted in some instances as a short-term capital loss.
  • 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.
  • 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.
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