Bankrot

Bankrot is a term used in several Central and Eastern European languages to denote bankruptcy or the status of being insolvent. It can refer to a person, a company, or another entity that is unable to meet its financial obligations. In everyday speech, it is often used to describe someone who has failed financially, while in formal contexts it denotes a legal status recognized by a court or insolvency authority.

Etymology and variants: The word derives from historic practices surrounding mercantile debt, with cognates such as bankrot, bankrut, or bankrutt appearing in different languages. The common thread across these terms is the formal recognition of insolvency and the start of a procedure to address creditors’ claims.

Legal concept and procedures: In jurisdictions that use the term, insolvency is typically declared after a formal filing or court determination. Insolvency procedures may aim to maximize assets available to creditors and can proceed through liquidation, where assets are sold to satisfy debts, or through reorganization, which seeks to preserve the debtor’s ongoing business where possible. Courts or designated insolvency administrators supervise the process, determine the priority of claims, and decide whether debts are discharged or restructured.

Consequences and scope: Being declared bankrot usually affects the debtor’s rights to manage assets, imposes restrictions on transactions, and can lead to debt relief or restructuring upon completion of the proceedings. The exact remedies, thresholds for insolvency, and creditor treatment vary by country and legal framework.

Notes: Bankrot remains primarily a legal term in many languages, but in everyday language it may be used more loosely to describe financial failure.