Bankruptcy is a legal process that helps individuals or businesses who cannot pay their debts. It allows them to either eliminate some debts or create a plan to repay them over time. The process is designed to give a fresh start to those in financial distress while ensuring fair treatment for creditors. There are different types of bankruptcy, such as Chapter 7 and Chapter 13 in the United States. Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows individuals to keep their property and repay debts through a structured plan over several years.