What is bankruptcy?

Bankruptcy is both a status and system of laws aimed at protecting individuals and businesses (collectively, individual). An individual is bankrupt when she is insolvent or the value of her debts exceeds the value of her assets. The bankruptcy system is a body of laws that allows for the elimination or restructuring of an individuals debt. The underlying objective of the system is to rehabilitate and allow for the future prosperity of the individual. The bankruptcy process is the subject of this chapter.