Act of Bankruptcy:
Noun: A legal term referring to a specific action or event that signifies an individual’s inability to repay their debts. An act of bankruptcy typically involves actions such as the intentional concealment of assets, fraudulent transfers, or the failure to pay debts as they become due. It serves as a trigger for bankruptcy proceedings, allowing creditors to initiate legal action against the debtor to recover their outstanding debts. The specific acts that constitute an act of bankruptcy may vary depending on the jurisdiction, but they generally indicate a debtor’s financial insolvency and inability to meet their financial obligations.
An Act of Bankruptcy refers to a specific action or event that can be used as grounds for declaring an individual or business bankrupt. This can include actions such as failing to pay debts, making fraudulent transfers of assets, or leaving the country to avoid creditors. Once an Act of Bankruptcy has been established, creditors may petition the court to declare the individual or business bankrupt and initiate bankruptcy proceedings. This legal concept is designed to protect the rights of creditors and ensure fair and orderly resolution of financial obligations.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March 2024.
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