UK Advice: Bankruptcy defined as settlement of Liabilities

BANKRUPTCY

Bankruptcy, in law, is defined as the settlement of the liabilities of a person or organization that wholly or partially is unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most instances, to discharge the debtor from further liability.

Bankruptcy proceedings may be voluntary (instituted by the debtor) or involuntary (instituted by creditors). The debtor may be insolvent that is unable to pay all debts even if the full value of all assets were realized—or may become insolvent when current obligations mature. Bankruptcy is also permitted when the discharge of debts would otherwise be unduly delayed,for example , if the debtor has fraudulently transferred property to put it out of a creditor's reach. When a person or corporation has declared or been adjudged bankrupt, preferred creditors (e.g., unpaid employees, or the federal government) are paid in full, and the other creditors share the proceeds of remaining assets.

Bankruptcy in Economic terms

Legally declared insolvency, or inability to pay creditors .

If an individual or a corporation declares bankruptcy, a court will appoint an official to make an inventory of the individual's or corporation's assets and to establish a schedule by which creditors can be partially repaid what is owed them.
An individual who is lacking a specific resource or quality is sometimes said to be Bankrupt.

Purpose of Bankruptcy Laws:

The primary purposes of the laws of bankruptcy are:

To give an honest debtor a "fresh start" in life by relieving the debtor of most debts.
To repay creditors in an orderly manner to the extent that the debtor has property available for payment.

Definition of Bankruptcy in legal dictionary

The administration of an insolvent debtor's property by the court for the benefit of the debtor's creditors (the debt was discharged in bankruptcy) (bankruptcy proceedings).
- Bankruptcy protects the debtor from debt collection by creditors. A debtor may file for bankruptcy, which is called “voluntary bankruptcy” or a creditor may petition the court to declare the debtor bankrupt, which is called “involuntary bankruptcy”.

For More Information on Bankruptcy Types : click here

To get a Free Advice on Bankruptcy from experts : click here

:: Back to Home ::