What is Bankruptcy?

Bankruptcy is a legal process for individuals, companies or other entities that are not able to pay their outstanding debt to creditors. Bankruptcy can offer reprieve of some or all of the debt. Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code: Chapter 7, which involves liquidation of assets; Chapter 11, which deals with company or individual reorganizations and Chapter 13, which is debt repayment with debt covenants or payment plans.

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