Bankruptcy is a formal legal status of a person or organization that is unable to repay their debts. It involves a court process in which the debtor's assets are evaluated and used to pay off as much of the outstanding debts as possible. The remaining debts are then discharged, meaning they are forgiven and the debtor no longer has a legal obligation to pay them. Bankruptcy laws vary by country and jurisdiction.

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What Is Bankruptcy

Question 6

Multiple Choice

What is bankruptcy?

A) It is a wrongful act by one party that results in injury to a second party's person, property, or reputation, for which the first party is liable.
B) It is a HYPERLINK "http://www.investorwords.com/2756/legal.html" legal process by which the lender takes away the borrower's HYPERLINK "http://www.investorwords.com/4282/right.html" right to a HYPERLINK "http://www.investorwords.com/3900/property.html" property.
C) It is a body of laws passed by state governments.
D) It is a formal legal condition of inability to repay debts.

Correct Answer: