Bankruptcy Laws are Federal Laws that can help a debtor in either repaying his debts or eliminating them by giving control to the Bankruptcy Courts over their financial affairs.
Title 11 of the US Code provides the following types of options for Bankruptcy – Personal Bankruptcies can be filed either under Chapter 7 (liquidation i.e. wiping out the debts in exchange for wiping of their non-exempt property) or Chapter 13 (i.e. retention of the property and payment of all or major portion of the debts in the time period of 3-5 years).
Corporations can file either a Chapter 7 bankruptcy or a Chapter 11 bankruptcy (i.e. reorganization of debts to stay in business and use this business for repayment of debts.) Besides this, Bankruptcy statutes cover various criminal acts related to bankruptcy that include fraud, concealment of assets/documents/information, false claims, false statements and arrangements for redistribution. In the US, besides the federal laws acting as a guide, it is important to be conversant with the state-specific laws on bankruptcy.