Definition of Business Bankruptcy
- 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.
- Chapter 11
Related Terms and Acronyms
- Small- and Medium-sized Enterprises (SMEs) — Abbreviation,
➥ A term widely used by the World Bank and the World Trade Organization (WTO).
- Limits banks place on businesses to determine there size.
- 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.