ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a liquidation bankruptcy, debtors must surrender their property, which is sold, and the proceeds distributed to creditors. In return, all debts are permanently discharged. In a reorganization bankruptcy, debtors are allowed to keep their property.

Detailed explanation-2: -Bankruptcy is a settlement of the debts of someone who is wholly or partially unable to repay their debts. It deals with both secured and unsecured debt. The purpose of the bankruptcy is to distribute your assets fairly among your creditors and protect you from these creditors.

Detailed explanation-3: -Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.

Detailed explanation-4: -Insolvency is a state of financial distress in which a person or business is unable to pay their debts. Insolvency in a company can arise from various situations that lead to poor cash flow.