Bankruptcy – n : legal term, popularly defined
as insolvency. Technically, bankruptcy is a legal process put in place to
insure fair and equal treatment of creditors of an insolvent company, and also
to protect the insolvent debtor to get started again by retaining assets that
are protected from liability. Chapter 11 bankruptcy is voluntary, meaning that
the debtor chooses to reorganize and restructure in order to repay debts.
Chapter 7, or involuntary bankruptcy, involves the shutting down and
liquidation of a business in order to repay creditors.
------------------------------------------------------------
Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
Copyright © 2004-2006 CompanyCrafters LLC