What is bankruptcy?

Anna Piskunova
Anna Piskunova
February 18, 2015
What is bankruptcy?

The economic sphere is perhaps the most dynamically developing today. We can see this at a fluctuating exchange rate day by day, the emergence of some organizations and the closure of others. Being engaged in business, it is worth remembering that everything flows and changes. Being successful in the market now, tomorrow you may not be in a better economic situation. Probably the most unfortunate option in the development of an economic entity would be its complete bankruptcy. About what is bankruptcy, let's talk further.

The word "bankruptcy" came to us from the Latin language. It does not have a literal translation. But perhaps the most appropriate Russian analogue of bankruptcy would sound like an inconsistency. True, it is worth making a reservation that here we mean a larger economic context. In the most general form of bankruptcy - the inability of the company to pay off debt.

The main point in declaring bankruptcy of the enterprise becomes the court decision.It can be requested by both the company's clients and the company itself in order to avoid the start of heavier litigation. The final chord in the bankruptcy procedure may be the complete liquidation of the organization or the sale of the company's funds to pay its debts. Sometimes bankruptcy is called the result itself, i.e. ruin a company, and sometimes a process or procedure ruin.