ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As a general rule, companies that are confronted with involuntary bankruptcy have incurred significant debts which they failed to pay as they became due. Consequently, they are also incapable of covering all or most of their expenses.

Detailed explanation-2: -Common reasons that people file for bankruptcy include loss of income, high medical expenses, an unaffordable mortgage, spending beyond their means, or lending money to loved ones. Often, a bankruptcy is a result of several of these factors combined.

Detailed explanation-3: -Bankruptcy does not change your rights as a secured creditor. You are still able to pursue the person for payment of the debt. You may repossess and sell the secured goods if the person is unable to maintain repayments.

Detailed explanation-4: -Bankruptcy is a legal proceeding initiated when a person or business is unable to repay outstanding debts or obligations. It offers a fresh start for people who can no longer afford to pay their bills.