Definition, Meaning & Synonyms

bankruptcy

noun

/ˈbæŋkrʌptsi/

Definition

The legal process through which individuals or businesses that cannot repay their outstanding debts seek relief from some or all of their liabilities.

Examples

After failing to pay her bills for six months, she had no choice but to file for bankruptcy.
The company declared bankruptcy, which allowed it to reorganize its debts and continue operating.
His bankruptcy was a result of poor financial planning and unexpected medical expenses.

Meaning

Bankruptcy is a financial state where a person or organization is unable to pay off their debts, resulting in the restructuring or elimination of those debts through the court system.