Bankruptcy is a legal proceeding carried out in order for individuals or legal entities to be freed from their debts, while at the same time providing creditors with the opportunity to repay them.
Bankruptcy is dealt with in federal courts, and the rules are set out in the US Bankruptcy Code.
There are various types of bankruptcy, commonly referred to as the appropriate chapter of the US Bankruptcy Code.
For example, chapter 11 on bankruptcy allows businesses to reorganize and revive, while chapter 7 deals with individual bankruptcy.
Bankruptcy may allow you to start a new life, but it will stay on your credit reports for several years and make it difficult to borrow in the future.
A debtor in possession (DIP) is an individual or entity that has filed for Chapter 11 bankruptcy protection but still owns property that creditors have legal claims under a lien or other lien.
A bond is a court decision that gives the creditor the right to take possession of the debtor’s property if the debtor fails to fulfill its contractual obligations.
The lifetime cost of a product or service refers to the total cost of owning it over its lifetime in addition to the initial purchase cost - in business you may hear this called TCO (Total Cost of Ownership).
In the subordination agreement, priority is given to secured debts that are arranged one behind the other in order to recover the amount of repayment from the debtor in the event of foreclosure or bankruptcy.