Bankruptcy is a state in which a person is unable to pay creditors and is required to undergo a legal process that usually results in liquidation of his/her estate in order to meet expenses (at least in part). It is similar, but not identical to insolvency. 

Insolvency is the inability to pay debts or meet expenses. Under early colonial law insolvency was treated as a different concept to bankruptcy (which involved an insolvents assets being administered and distributed to creditors).