United States Bankruptcy Code

The United States Bankruptcy Code is a federal law that provides a legal process for individuals and businesses overwhelmed by debt to either reorganize and repay their debts or to eliminate them. It offers different types of bankruptcy, such as Chapter 7 (liquidation) and Chapter 13 (reorganization), allowing for structured debt relief. The process aims to give debtors a fresh financial start while ensuring creditors can recover some of their funds. Bankruptcy can impact credit ratings and financial options but is a legal right for those in financial distress.