Bankruptcy

Bankruptcy is a legal proceeding involving a person or business that is unable to repay their outstanding debts. The bankruptcy process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common. All of the debtor's assets are measured and evaluated, and typically some portion of the assets may be used to repay at least a part of the outstanding debt.

In addition, although a bankruptcy discharge will cancel most debts, it won’t cancel alimony, child support, certain unpaid taxes (including liens), and student loans.

In the United States, the most common types of personal bankruptcy are Chapter 7 and Chapter 13.