Bankruptcy

Bankruptcy

Inability to pay debts. In bankruptcy of a publicly owned entity, the ownership of the firm's assets is transferred from the stockholders to the bondholders.

---

bankruptcy

The financial status of a firm that has been legally judged either to have debts that exceed assets or to be unable to pay its bills. Formal bankruptcy may result in reorganization and continued operation of the firm or it may require liquidation and distribution of the proceeds. In either case, most security owners, especially shareholders, are likely to suffer losses. Stock transaction tables indicate that a company is in bankruptcy proceedings by appending vi or q immediately before the name of the stock. See also Chapter 7, Chapter 11, reorganization.

---

Bankruptcy. Bankruptcy means being insolvent, or unable to pay your debts. In that case, you can file a bankruptcy petition to seek a legal resolution.

Chapter 7 bankruptcy, which allows you to discharge your unsecured debts but may result in your losing your home, car, or other secured debt, is available only to those whose earn less than the median for their state or qualify because of special circumstances.

With Chapter 11 bankruptcy, also called reorganization bankruptcy, you work with the court and your creditors to repay debt over three to five years.

However, some debts are not reduced by a declaration of bankruptcy, including past due federal income taxes, alimony, and higher education loans. Similarly, when you hear that a company is reorganizing or is "in Chapter 11," it means it has filed for bankruptcy.

---

Bankruptcy

For tax purposes, a formal petition filed in a Bankruptcy Court under Chapter 7, 11, 12, or 13 of Title 11 of the U.S. Code.