U.S. Bankruptcy Code

The U.S. Bankruptcy Code is federal legislation that provides a legal process for individuals and businesses to address overwhelming debt. It allows those who cannot pay their debts to either restructure their payment plans (Chapter 11 for businesses, Chapter 13 for individuals) or liquidate their assets to pay creditors (Chapter 7). The goal is to give debtors a fresh start while ensuring fair treatment of creditors. The process involves court supervision and can have long-term effects on credit, but ultimately aims to help individuals or businesses regain financial stability.