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Simple English definitions for legal terms
prebankruptcy
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A quick definition of prebankruptcy:
Term: PREBANKRUPTCY
Definition: Prebankruptcy refers to actions or events that take place before a person or company files for bankruptcy. This can include financial transactions, such as selling assets or paying off debts, that may impact the bankruptcy case. Essentially, prebankruptcy refers to anything that happens before the official start of the bankruptcy process.
A more thorough explanation:
PREBANKRUPTCY
Prebankruptcy is an adjective used to describe something that happens before a person or company files for bankruptcy. For example, prebankruptcy transactions refer to any financial transactions that occur before the bankruptcy filing.
- A company may sell off assets in a prebankruptcy sale to raise money before filing for bankruptcy.
- A person may try to negotiate with creditors in a prebankruptcy settlement to avoid filing for bankruptcy.
These examples illustrate how prebankruptcy actions can be taken to try to avoid or prepare for a bankruptcy filing. They also show how financial transactions and negotiations can occur before the actual filing of bankruptcy.