
Bankruptcy is a legal process which allows a person (a
“Debtor”), who owes more money than he or she can currently repay,
to either (1) repay a portion of the money over time under Chapter
11, 12, or 13, or (2) have the entire debt forgiven (“discharged”)
under chapter 7. Under chapter 7, a Debtor may be required to
surrender assets to a trustee. Bankruptcy is also available to
businesses, corporations, and partnerships. Even municipal
governments can file bankruptcy (under Chapter 9).