explain what 'bankrupt' means

Jun 16th, 2016
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Please explain what 'bankrupt' means in terms of business-related concerns. Explain the term as used in financial dealings. Cite US laws involving this.

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Running head: BANKRUPTCY EXPLAINEDThe US Law on BankruptcyInstitution affiliationName1BANKRUPTCY EXPLAINED2A person or business is declared bankrupt or insolvent by a court order when they are not able topay all their debts. Usually, the debtor initiates the bankruptcy procedures. The form ofbankruptcy so initiated is referred to as voluntary bankruptcy. On the other hand, the creditorsmay seek a court ruling to declare the debtor insolvent, thus becoming involuntary bankruptcy(U.S. Const. art. I, 8, cl. 4).The initiated bankruptcy can either try to come up with a reorganization plan through which thedebt could be cleared, or clear all outstanding debts. Most businesses opt for the bankruptcyfiling outlined in chapter 11 that allows a business to keep on running as it reorganizes its debts(Jackson, 2001). When a company is going on with the procedures of Chapter

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