Bankruptcy is a legal process that allows individuals or businesses to restructure or discontinue debts and obligations when they are unable to pay them. The goal of bankruptcy is to provide relief from financial burdens and give individuals the opportunity to start fresh.

1. A bankruptcy can be filed with one of several different types, including Chapter 7, Chapter 11, and Chapter 13.
2. Chapter 7 bankruptcies involve liquidating assets to pay off creditors, while Chapter 11 involves reorganizing debts into a more manageable payment plan. Chapter 13 focuses on creating a repayment schedule for specific debts.

The bankruptcy process typically begins with the individual or business filing a petition with the court and providing financial information. A trustee is then appointed to oversee the case, ensuring that assets are distributed fairly among creditors.

Types of Bankruptcy

• Chapter 7: Liquidation bankruptcy, which allows for the disposal of non-exempt assets to pay off creditors.
• Chapter 11: Reorganization bankruptcy, designed for businesses with complex financial situations.
• Chapter 13: Debt consolidation and repayment plan, suitable for individuals with multiple debts.

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