Consumer bankruptcy is a legal process that allows individuals or households to eliminate or repay their debts under the protection of the federal bankruptcy court. It is designed to help people who are unable to meet their financial obligations due to various reasons, such as job loss, medical expenses, or unexpected emergencies. The most common types of consumer bankruptcy are Chapter 7 and Chapter 13. In Chapter 7 bankruptcy, most unsecured debts are discharged, meaning the debtor is no longer responsible for them. In Chapter 13 bankruptcy, individuals create a repayment plan to pay back a portion of their debts over three to five years. Both options provide a fresh start, but they also have long-term effects on a person's credit score.