Samraworld Dictionary
(1)
Noun
A legal proceeding initiated when a person or business is unable to repay outstanding debts or obligations. A court examines the assets and liabilities of the person or business whose debts have become so overwhelming they don’t believe they can pay them, and decide whether to discharge the debts; meaning that those who owe money are no longer legally required to pay it back.
Examples
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John's father declared bankruptcy after he lost his job, and could not pay his monthly mortgage.