Chapter 27 Flashcards
1
Q
What does Insolvent mean?
A
Unable to meet financial obligations as they become due or having insufficient assets. Liabilities > Asset
2
Q
What does Bankrupt mean?
A
Legal status of a debtor who has made an assignment or against whom a bankruptcy order has been issued, Must be insolvent to go bankrupt,
3
Q
What is the purpose for Bankruptcy Law?
A
Protect creditors and gives debtors a second chance
4
Q
What is Receivership?
A
Appointment of a receiver by a secured creditor to take possession of a debtor’s assets
5
Q
What is the difference between businesses and individuals that go bankrupt?
A
Businesses die after they declare, while individuals will get another change in 9 months
