Debt Consolidation

A legal declaration of one's inability to pay his/her creditors. In most cases, voluntary bankruptcy is initiated by the individual in debt (the debtor); in rare cases, creditors may file a bankruptcy petition against a debtor to initiate an involuntary bankruptcy.

Taking out a loan to pay off other smaller debts, usually on better payment terms than those offered by the smaller debts on the whole.

The failure to pay back a loan or a credit card balance.