A legal procedure known as bankruptcy is used to liberate people or corporations from their debts while also giving creditors a chance to be paid back.
The U.S. Bankruptcy Code contains guidelines for bankruptcy proceedings, which are handled by federal courts.
Chapters of the U.S. Bankruptcy Code are frequently used to identify the various types of bankruptcy.
For instance, although Chapter 7 bankruptcy deals with individual bankruptcy, Chapter 11 bankruptcy enables firms to reorganise and reemerge.
Although declaring bankruptcy can provide you a fresh start, it will remain on your credit reports for a while and make it more challenging for you to obtain money in the future.