Bankruptcy filings occur when individuals or businesses seek legal relief from their debts. This process allows them to reorganize their finances or eliminate certain debts under the protection of the court. There are different types of bankruptcy, such as Chapter 7 for liquidation and Chapter 13 for reorganization, each serving different needs. When a bankruptcy filing is made, it triggers an automatic stay, which halts most collection activities against the debtor. This gives the filer time to assess their financial situation and work on a plan to address their debts, ultimately aiming for a fresh start.