Which term describes the legal proceedings for distributing a bankrupt person's assets?

The term that describes the legal proceedings for distributing a bankrupt person's assets is "bankruptcy." Bankruptcy is a legal process that provides individuals or businesses in financial distress with the opportunity to reorganize and settle their debts while being protected from creditors. In these proceedings, a court determines how the individual's or entity's debts will be resolved, which may include liquidating assets to pay off creditors or creating a repayment plan.

Choosing this term is appropriate because it directly relates to the legal framework governing the handling of a person's financial obligations when they can no longer meet them. The other terms refer to different legal processes; for instance, liquidation is often used in the context of dissolving a company, foreclosure involves reclaiming property due to unpaid mortgage debts, and probate pertains to the distribution of a deceased person's estate. Thus, bankruptcy is the specific term that encapsulates the distribution of a bankrupt individual's assets through legal proceedings.