bankruptcy

Vocabulary Word

Definition

'Bankruptcy' is a formal state of being unable to meet debt obligations. It usually involves a legal process, which can result in forgiving some or all debts or creating a repayment plan.

Examples in Different Contexts

In corporate finance, 'bankruptcy' is a crucial concept detailing a company's inability to meet financial obligations. A CEO might announce, 'We are exploring all options to avoid bankruptcy and ensure the company’s survival.'

Practice Scenarios

Law

Scenario:

Given the magnitude of your financial burden, we may need to explore potentially drastic legal remedies.

Response:

Undoubtedly, the situation is severe, but are there any alternatives to avoid bankruptcy?

Accounting

Scenario:

Unfortunately, the company's debts far exceed its assets. It's necessary to consider all possible avenues for resolving this issue.

Response:

There's no alternative left but to initiate bankruptcy proceedings given the insurmountable debt.