Is a federal legal process during which debtors seek to eliminate or attempt to repay their debts. Bankruptcy’s governing federal statutory law is held in the title 11 of the U.S. Code. It provides that a federal system of statues & courts which allow debtors to place their financial affairs under the control of the court(Bankruptcy Court).
The Bankruptcy Court is one of the highest courts that is a specialized federal court in which debt and bankruptcy matters under the Federal Bankruptcy Act are conducted. There are a numerous amount of bankruptcy courts in each state, which are smaller branches of the district courts of the United States, and each one’s territory covers several cities and counties.
There are multiple ways of filling bankruptcy, the most common type of personal bankruptcy for individuals is Chapter 7, which allows debtors to wipe out many debts they’ve built up over time and in exchange for giving up non-exempt property to be sold to repay creditors. There is another common bankruptcy which is called chapter 13, which helps debtors to keep all of their property and repay all or a portion of their debts over three to five years. There is a different class of bankruptcy that business can file but they may also file for Chapter 7 Bankruptcy or for Chapter 11 Bankruptcy. Chapter 11 bankruptcy lets a company or business to restructure its debt to stay in business and use business income to pay its debt.