ECONOMICS

Detailed explanation-1: -When a person cannot repay a loan or the money that he has borrowed, he is said to be a ‘bankrupt’. Thus option A is the correct answer. ‘A person who is unable to pay his/her debt is called a ‘bankrupt.

Detailed explanation-2: -Your debt will go to a collection agency. Debt collectors will contact you. Your credit history and score will be affected. Your debt will probably haunt you for years.

Detailed explanation-3: -A person or firm whose liabilities exceed the value of owned assets is termed as insolvent. It is the inabilities of the company or person to pay liabilities as they become due.

Detailed explanation-4: -Insolvency is a financial state where a person cannot meet debt payments on time. Bankruptcy is a legal process that happens when the individual declares he or she can no longer pay back his or her debts to creditors.