Chapter 27

Question 1

What does Insolvent mean?

Answer 1

Unable to meet financial obligations as they become due or having insufficient assets. Liabilities > Asset

Question 2

What does Bankrupt mean?

Answer 2

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,

Question 3

What is the purpose for Bankruptcy Law?

Answer 3

Protect creditors and gives debtors a second chance

Question 4

What is Receivership?

Answer 4

Appointment of a receiver by a secured creditor to take possession of a debtor’s assets

Question 5

What is the difference between businesses and individuals that go bankrupt?

Answer 5

Businesses die after they declare, while individuals will get another change in 9 months