Bankruptcy
federal system of statutes and courts which permits persons and businesses which
are insolvent (debtors) or (in some cases) face potential insolvency, to place
their financial affairs under the control of the bankruptcy court; the procedure
is that when the debtor's debts exceed their assets or ability to pay, the
debtor can file a petition with the bankruptcy court for voluntary bankruptcy or
the debtor's unpaid creditors can file an "involuntary" petition to force the
debtor into bankruptcy, although voluntary bankruptcy is far more common