A bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the protection of the federal bankruptcy court. It is often sought when a person or company cannot meet their financial obligations, providing a fresh start by discharging certain debts or creating a repayment plan. There are different types of bankruptcies, such as Chapter 7 and Chapter 13 for individuals, and Chapter 11 for businesses. Each type has specific rules and procedures, but the overall goal is to help debtors regain financial stability while ensuring fair treatment for creditors.