Bankruptcy or insolvency is a formal legal process which happens when a person or organization cannot repay the debts it owes to its creditors. Bankruptcy means they can be released from having to do so over time.

In the majority of cases, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent individual or organisation).

"Involuntary bankruptcy" is when creditors file a bankruptcy petition against a business or corporate debtor in an effort to recoup a portion of what they are owed. An involuntary bankruptcy petition may not be filed against an individual consumer debtor who is not engaged in business.

For more information on bankruptcy go to: