Please define bankruptcy. What are the various forms of bankruptcy that can be filed? Why do firms file bankruptcy? What are the issues and costs associated with bankruptcy?
When a person or business is declared bankrupt, it essentially means that a court has found them to be insolvent, or unable to pay their debts. This has become more and more common in recent years when creditors began to lower their credit standards because the banks, mortgage companies, and other financial institutions began extending credit to a higher risk credit group. When a person or business is declared insolvent, their current debts become a part of the bankruptcy, and the person or company is no longer legally responsible for paying the debts. All debts are typically included in the bankruptcy that the person or business has, and become uncollectible.
A few of the main types of bankruptcy include Chapter 7 bankruptcy, ...
The solution provides a detailed explanation examining why firms file for bankruptcy, the definition of bankruptcy, and the issues and costs associated with bankruptcy.