A proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. Chapter 7 of the Bankruptcy Reform Act deals with liquidation, while Chapter 11 deals with reorganization.

Use bankruptcy in a sentence

IF everything else has failed your best play may be to file for bankruptcy and try to start all over again.

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Fred had a lot of credit card debt he wasn't able to pay and few assets, so he decided to declare bankruptcy.

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After my company lost business to an overseas competitor, we had no choice but to try to resolve our unpayable debts by declaring bankruptcy.

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