Bankruptcy

A legal status in which a person who cannot pay his or her debts obtains protection from further action by most unsecured creditors. The person may lodge his or her own petition to become bankrupt (a debtor's petition) or a creditor may lodge a petition to make the debtor bankrupt (a sequestration order). When a person becomes bankrupt, his or her property is administered by the trustee to allow for the fair distribution of property among creditors.