Skip to main content

Are you a legal professional? Visit our professional site

Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

What Is Bankruptcy?

Bankruptcy offers a path to relief from overwhelming debt for people facing financial difficulties. It is a court-supervised process where a person legally declares themselves unable to pay outstanding debts.

There are two types of bankruptcy available to people in debt, often called "consumer debt." You might choose to:

  • Determine a debt repayment plan schedule (Chapter 13)
  • Discharge most (if not all) debts (Chapter 7)

Small businesses can declare business bankruptcy (Chapter 11). This means the company will close or continue to operate with a reorganization and reduced payments to debtors. Chapter 7 is also available to small businesses that need to close due to significant debt.

Note: For those facing bankruptcy due to COVID-19, you may have special rules applicable to your case.

What Is Bankruptcy?

Copied to clipboard

Find a Lawyer

More Options