What is Bankruptcy?

"Bankruptcy" refers generally to various types of a legal case filed under Title 11 of the United States Code, also known as the Bankruptcy Code.  It is a legal proceeding by which a Petitioner ("Debtor") seeks immediate protection from creditors, and a permanent solution to debt burdens.  The Debtor's remedy may lie in reorganizing debts under a payment plan (for consumers, Chapter 13), or simply obtaining a complete release from debts (for consumers, Chapter 7).  The bankruptcy case begins by filing a Petition, and attaching schedules disclosing income, expenses, debts, property and other financial information.  These forms (Official Bankruptcy Forms) are mandated by federal law.  A trustee is appointed to represent the interests of the Debtor's creditors, and to act as a case administrator for the bankruptcy estate.  The bankruptcy case is concluded (depending upon the type of case filed) by an order releasing the Debtor from dischargeable debts, or by confirming a plan that the Debtor will pay over a period of time.

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