What is meant by intentional bankruptcy?

Intentional bankruptcy refers to a strategy where an individual or business seeks to avoid paying legitimate debts under false pretenses, often by providing misleading or fraudulent information. This approach involves deliberately misleading creditors or the court about one’s financial situation, which is not only unethical but also illegal. In contrast, the other options describe situations or processes that do not involve fraudulent intent; for instance, a legal process for debt resolution is a legitimate way to handle financial distress, while the circumstance of a debtor filing for bankruptcy without fraud implies that the process was carried out honestly. The characterizations of bankruptcy as an involuntary action by creditors do not encapsulate the idea of intentionality, and therefore, these options do not align with the concept of using deception to achieve bankruptcy status.