United States bankruptcy law

United States bankruptcy law provides a legal process for individuals or businesses overwhelmed by debt to reorganize or eliminate their liabilities. Filing for bankruptcy offers a fresh financial start, under court supervision, by either restructuring debts (Chapter 13) or liquidating assets to pay creditors (Chapter 7). It also provides protections like an automatic stay, preventing creditors from pursuing collection efforts while the case is handled. The law aims to balance debt relief with fairness to creditors, ensuring transparent, equitable resolutions based on the debtor’s financial situation.