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Definition of 'Bankruptcy'

Bankruptcy is a legal process that occurs when a person or business is unable to pay their debts. There are two types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is a liquidation bankruptcy, which means that the debtor's assets are sold and the proceeds are used to pay off creditors. Chapter 13 bankruptcy is a reorganization bankruptcy, which allows the debtor to keep their assets and repay their debts over time.

There are a number of reasons why someone might file for bankruptcy. Some of the most common reasons include:

* Job loss
* Medical expenses
* Divorce
* Natural disasters
* Business failure

If you are considering filing for bankruptcy, it is important to speak to an attorney to learn about your options. Bankruptcy can have a significant impact on your credit score and your ability to borrow money in the future. However, it can also be a way to get a fresh start and to get your finances back on track.

Here are some additional details about bankruptcy:

* The bankruptcy process can take anywhere from a few months to a year.
* During the bankruptcy process, you will be required to file a number of documents with the court.
* You will also be required to attend a number of court hearings.
* Once the bankruptcy process is complete, you will be discharged from your debts. However, there are some debts that are not discharged in bankruptcy, such as student loans and child support.

If you are considering filing for bankruptcy, it is important to weigh the pros and cons carefully. Bankruptcy can be a helpful tool for getting your finances back on track, but it is also a serious decision that should not be taken lightly.

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