Bankruptcy is a legal status of a person or other entity who cannot repay debts to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Wikipedia
Bankruptcy helps people who can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect financially troubled businesses. This section explains the bankruptcy process and laws. United States Courts
Foreclosures and excessive debts are a homeowner’s worst nightmares come true. Many believe bankruptcy to be the perfect solution for these problems. But, that’s where people get trapped. Bankruptcy stays on your credit record for quite a long time, making advancing in life incredibly difficult. In addition, the updated bankruptcy law, passed in 2005, includes severe restrictions that make it more complicated to file for bankruptcy. Investopedia