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Bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Bankrupt is not the only legal status that an insolvent person may have, and the term ''bankruptcy'' is therefore not a synonym for insolvency. Etymology The word ''bankruptcy'' is derived from Italian language, Italian ''banca rotta'', literally meaning "broken bank". The term is often described as having originated in renaissance Italy, where there allegedly existed the tradition of smashing a banker's bench if he defaulted on payment so that the public could see that the banker, the owner of the bench, was no longer in a condition to continue his business, although some dismiss this as a false etymology. History In Ancient Greece, bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chapter 13, Title 11, United States Code
Title 11 of the United States Code sets forth the statutes governing the various types of relief for bankruptcy in the United States. Chapter 13 of the United States Bankruptcy Code provides an individual with the opportunity to propose a plan of reorganization to reorganize their financial affairs while under the bankruptcy court's protection. The purpose of chapter 13 is to enable an individual with a regular source of income to propose a chapter 13 plan that provides for their various classes of creditors. Under chapter 13, the Bankruptcy Court has the power to approve a chapter 13 plan without the approval of creditors as long as it meets the statutory requirements under chapter 13. Chapter 13 plans are usually three to five years in length and may not exceed five years. Chapter 13 is in contrast to the purpose of Chapter 7, which does not provide for a plan of reorganization, but provides for the discharge of certain debt and the liquidation of non-exempt property. A Chapte ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt Restructuring
Debt restructuring is a process that allows a private or public company or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts to improve or restore liquidity so that it can continue its operations. Replacement of old debt by new debt when not under financial distress is called " refinancing". Out-of-court restructurings, also known as s, are increasingly becoming a global reality. Motivation Debt restructuring involves a reduction of debt and an extension of payment terms and is usually less expensive than bankruptcy. The main costs associated with debt restructuring are the time and effort spent negotiating with bankers, creditors, vendors, and tax authorities. In the United States, small business bankruptcy filings cost at least $50,000 in legal and court fees, and filing costs in excess of $100,000 are common. By some measures, only 20% of firms survive Chapter 11 bankruptcy filings. Historically, debt re ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Insolvency
In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet insolvency. Cash-flow insolvency is when a person or company has enough assets to pay what is owed, but does not have the appropriate form of payment. For example, a person may own a large house and a valuable car, but not have enough liquid assets to pay a debt when it falls due. Cash-flow insolvency can usually be resolved by negotiation. For example, the bill collector may wait until the car is sold and the debtor agrees to pay a penalty. Balance-sheet insolvency is when a person or company does not have enough assets to pay all of their debts. The person or company might enter bankruptcy, but not necessarily. Once a loss is accepted by all parties, negotiation is often able to resolve the situation without bankruptcy. A company th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Distress
Financial distress is a term in corporate finance used to indicate a condition when promises to creditors of a company are broken or honored with difficulty. If financial distress cannot be relieved, it can lead to bankruptcy. Financial distress is usually associated with some costs to the company; these are known as ''costs of financial distress''. Cost A common example of a cost of financial distress is bankruptcy costs. These direct costs include auditors' fees, legal fees, management fees and other payments. Cost of financial distress can occur even if bankruptcy is avoided (indirect costs). Financial distress in companies requires management attention and might lead to reduced attention on the operations of the company. Another source of indirect costs of financial distress are higher costs of capital as usually banks increase the interest rates if a state of financial distress occurs. Options for relieving financial distress If high debt burden is the cause of fin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debtor
A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this debt arrangement is a bank, the debtor is more often referred to as a borrower. If X borrowed money from their bank, X is the debtor and the bank is the creditor. If X puts money in the bank, X is the creditor and the bank is the debtor. It is not a crime to fail to pay a debt. Except in certain bankruptcy situations, debtors can choose to pay debts in any priority they choose. But if one fails to pay a debt, they have broken a contract or agreement between them and a creditor. Generally, most oral and written agreements for the repayment of consumer debt - debts for personal, family or household purposes secured primarily by a person's residence - are enforceable. For the most part, debts that are business-related must be made in wr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Creditor
A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption (usually enforced by contract) that the second party will return an equivalent property and service. The second party is frequently called a debtor or borrower. The first party is called the creditor, which is the lender of property, service, or money. Creditors can be broadly divided into two categories: secured and unsecured. *A secured creditor has a security or charge over some or all of the debtor's assets, to provide reassurance (thus to ''secure'' him) of ultimate repayment of the debt owed to him. This could be by way of, for example, a mortgage, where the property represents the security. *An unsecured creditor does not have a charge over the debtor's assets. The term credito ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical region. Italy is also considered part of Western Europe, and shares land borders with France, Switzerland, Austria, Slovenia and the enclaved microstates of Vatican City and San Marino. It has a territorial exclave in Switzerland, Campione. Italy covers an area of , with a population of over 60 million. It is the third-most populous member state of the European Union, the sixth-most populous country in Europe, and the tenth-largest country in the continent by land area. Italy's capital and largest city is Rome. Italy was the native place of many civilizations such as the Italic peoples and the Etruscans, while due to its central geographic location in Southern Europe and the Mediterranean, the country has also historically b ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Statute Of Bankrupts Act 1542
The Statute of Bankrupts or An Acte againste suche persones as doo make Bankrupte, 34 & 35 Henry VIII, c. 4, was an Act passed by the Parliament of England in 1542. It was the first statute under English law dealing with bankruptcy or insolvency. It was repealed by section 1 of the Act 6 Geo.4 c.16. The Act contained an extremely long preamble which denounced debtors acting in fraud of their creditors, directed that the bodies of the offenders and all of their assets be taken by the requisite authorities and the assets be sold to pay their creditors "a portion, rate and rate alike, according to the quantity of their debts". Thereby the first bankruptcy statute also imported into English law for the first time the ''pari passu'' principle of distribution on insolvency. These principles would later be heavily underscored by the House of Lords in the cases of '' National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd'' 972AC 785 and '' British Eagle International A ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt Slavery
Debt bondage, also known as debt slavery, bonded labour, or peonage, is the pledge of a person's services as security for the repayment for a debt or other obligation. Where the terms of the repayment are not clearly or reasonably stated, the person who holds the debt has thus some control over the laborer, whose freedom depends on the undefined debt repayment. The services required to repay the debt may be undefined, and the services' duration may be undefined, thus allowing the person supposedly owed the debt to demand services indefinitely. Debt bondage can be passed on from generation to generation. Currently, debt bondage is the most common method of enslavement with an estimated 8.1 million people bonded to labour illegally as cited by the International Labour Organization in 2005. Debt bondage has been described by the United Nations as a form of " modern day slavery" and the Supplementary Convention on the Abolition of Slavery seeks to abolish the practice.Article 1(a) ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Sovereign Default
A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments (or receivables) may either be accompanied by that government's formal declaration that it will not pay (or only partially pay) its debts (repudiation), or it may be unannounced. A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments. Countries have at times escaped some of the real burden of their debt through inflation. This is not "default" in the usual sense because the debt is honored, albeit with currency of lesser real value. Sometimes governments devalue their currency. This can be done by printing more money to apply toward their own debts, or by ending or altering the convertibility of their currencies into precious metals or foreign currency at fixed rates. Harder to quantify than an inte ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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