system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why are people able to declare personal bankruptcy despite having substantial assets?

I've seen many times when very wealthy people declare bankruptcy despite obviously not being broke. 50 Cent maybe being the easiest example.
gpt
Bankruptcy does not mean someone has no assets. It also doesn't mean they necessarily get out of their existing debts without paying them.

When a person or company declares bankruptcy they are saying they cannot satisfy their current debts on time or in full. The courts are asked to step in and mediate who gets paid how much and in what order/time frame.

For example if you owe $5 million due today and own a $10 million mansion without any cash you would declare bankruptcy. You have assets but they aren't liquid. You could probably sell the mansion for only $5 million nearly instantly but that would be a huge waste; the courts will decide a balance between haste and a reasonable price.