Bankruptcy is a legal proceeding initiated when a person or business is unable to repay outstanding debts or obligations. The process of determining whether someone is bankrupt involves examining their financial situation, including assets, liabilities, and income.
Checking for bankruptcy can be essential for various reasons. It allows creditors to assess the financial health of potential borrowers and determine the risk associated with extending credit. Additionally, individuals may need to verify bankruptcy status for legal or personal reasons, such as in cases of divorce or estate planning.