What is Bankruptcy & Insolvency?
The financial inability to pay one’s debts when due. 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. Generally, not all debts are repaid in a bankruptcy. The court determines which debts are to be repaid according to their priority, and the debtor is typically granted a discharge from unpaid debts that are dischargeable under the Bankruptcy and Insolvency.
