Bankruptcy is a legal process that provides individuals or businesses with a fresh start by eliminating or restructuring their debts. It allows debtors to manage their financial difficulties and, in some cases, have their debts discharged.

Individuals, partnerships, corporations, and other business entities can file for bankruptcy. However, there are different types of bankruptcy options available, and eligibility requirements may vary depending on the specific circumstances.

The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves the liquidation of assets to pay off debts, while Chapter 13 bankruptcy allows individuals to restructure their debts and create a repayment plan. For businesses, Chapter 11 bankruptcy is often used to reorganize and continue operations.

Filing for bankruptcy can have both positive and negative consequences. On the positive side, it can provide relief from overwhelming debt and stop creditor actions. However, it can also impact credit scores, limit access to credit in the future, and may require the liquidation of assets.

The bankruptcy process typically involves filing a petition with the bankruptcy court, attending a meeting of creditors, and completing required financial counseling. The court will review the case, determine the type of bankruptcy, and oversee the process until debts are discharged or a repayment plan is completed.

Not all debts can be discharged in bankruptcy. Some common examples of nondischargeable debts include certain taxes, child support, alimony, student loans (in most cases), and debts arising from fraudulent activities. It is important to consult with a bankruptcy attorney to understand which debts can be discharged in your specific situation.

The decision to file for bankruptcy is a personal one and should be based on your individual circumstances. It is recommended to consult with a bankruptcy attorney who can evaluate your financial situation, explain the potential benefits and consequences, and guide you through the process.