Definition: A legal process entered into by those who can no longer pay their debts. Bankruptcy can afford you time to pay off your debts. Generally during bankruptcy proceedings, your assets are given to an official receiver who will liquidate them to pay off your creditors. When filing for bankruptcy, it is important to list all of those to whom you owe a debt.
Often, once the process is completed, any outstanding debts at the end of the proceedings are written off. However, a bankruptcy will stay on your credit report for at least 10 years and you may find it hard to obtain new credit for some time after you have filed for bankruptcy.
For those who have fallen into arrears, this may be the best option for resolving debt and moving on.
See Also: Arrears
Definition: A levy the Internal Revenue Services (IRS) can put on your bank accounts or holdings with financial institutions. Using a Bank Levy, the IRS can force your financial institution to deduct some of your account holdings and send it directly to the IRS to pay back taxes.
The IRS is not the only government agency that is capable of garnishing your financial accounts with a Bank Levy. In many jurisdictions, agencies like Child or Spousal Support Enforcement, Fraud Investigation, or Judicial Courts may be able to establish a Bank Levy if you owe money to the government or a third-party whose interests are protected by the government.
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