how bankruptcy works
bankruptcy offers an individual or business a chance to start fresh by forgiving debts that they can t pay meanwhile creditors have a chance to get some repayment based on the individual s or business s assets available for liquidation in theory the ability to file for bankruptcy benefits the overall economy by allowing people and companies a second chance to gain access to credit it can also help creditors regain a portion of debt repayment all bankruptcy cases in the united states go through federal courts a bankruptcy judge makes decisions including whether a debtor is eligible to file and whether they should be discharged of their debts administration over bankruptcy cases is often handled by a trustee an officer appointed by the united states trustee program of the department of justice to represent the debtor s estate in the proceeding the debtor and the judge usually have no contact unless there is some objection made in the case by a creditor when bankruptcy proceedings are complete the debtor is relieved of their debt obligations 1investopedia ryan oakley