Bankruptcy is a legal process that helps individuals or businesses who cannot repay their debts. It allows them to either discharge (eliminate) or restructure their obligations under court supervision.
There are various types of bankruptcy, depending on whether the filer is an individual or a corporation.
While bankruptcy can offer a financial reset, it carries significant consequences such as damage to credit scores, difficulty securing future loans, and the possible loss of assets.
Despite these downsides, bankruptcy exists to provide a structured way to resolve overwhelming debt and restore financial stability, offering both the debtor and creditors a fair and legal path forward.