Banking Term: Bankruptcy

Find important banking term that is useful in upcoming banking exam.

May 1, 2015 17:17 IST

The legal proceedings by which the affairs of a bankrupt person are turned over to a trustee or receiver for administration under the bankruptcy laws.

There are two types of bankruptcy:

  • Involuntary bankruptcy-one or more creditors of an insolvent debtor file a petition having the debtor declared bankrupt.
  • Voluntary bankruptcy-the debtor files a petition claiming inability to meet financial obligations and willingness to be declared bankrupt.

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