Legal Definitions - bankruptcy proceeding

Definition: A bankruptcy proceeding is a legal process that occurs when an individual or business is unable to pay their debts. It involves a court case where a judge decides how to handle the debts and assets of the bankrupt entity.

Examples:

• John filed for bankruptcy and is now going through a bankruptcy proceeding in court.
• The bankruptcy proceeding for the company lasted several months and involved selling off assets to pay creditors.

These examples illustrate how a bankruptcy proceeding is a legal process that occurs when someone is unable to pay their debts. In both cases, the individuals are going through a court case where a judge is deciding how to handle their debts and assets. The bankruptcy proceeding can involve selling off assets to pay creditors, as seen in the second example.