What is the difference between “sequestration”, “bankruptcy”, “liquidation”, “insolvency” and “surre

Q: What is the difference between “sequestration”, “bankruptcy”, “liquidation”, “insolvency” and “surrender of estate”?

A: “Sequestration”, “bankruptcy” “insolvency” and “liquidation” are all different terms, which in layman’s terms simply mean that a person or business is in such a bad financial state that creditors cannot get paid. The term “liquidation” refers to the bankruptcy of a company or close corporation and certain other legal entities. “The term “sequestration”refers to the bankruptcy of a natural person or a trust. “Surrender of estate” refers to the process where a natural person asks a court to declare him insolvent.