bankruptcy
n. C / Un. the legal state of being unable to pay your debts. When a person or company reaches this point, a court usually helps manage their remaining money to pay back what they owe.
n. the legal status of a person or entity that cannot repay debts to creditors. It involves a formal court process where assets are liquidated or restructured to satisfy outstanding financial obligations.
The company filed for bankruptcy after a year of heavy losses.
Filing for bankruptcy allowed the small business to freeze its debts while it worked on a new repayment plan.
While some view bankruptcy as a total financial failure, it often serves as a necessary legal mechanism to provide debtors with a fresh start while ensuring equitable distribution among creditors.
From bankrupt + -cy, replacing earlier bankruptship.
Often used with the verbs 'file for' or 'declare'. Uncountable when referring to the general legal state; countable when referring to specific instances or legal cases.
The company went to bankruptcyThe company went bankruptLearners often confuse the noun 'bankruptcy' with the adjective 'bankrupt' after the verb 'go'.