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"Bankruptcy" refers to a set of laws and rules that can help a debtor who is facing more debt than he or she can afford to pay. Bankruptcy permits the debtor to work out a plan to repay some or all of the debt, or to have some of the debt forgiven. The bankruptcy laws give the debtor protections and benefits that are not available outside of bankruptcy and require that creditors stop all collection efforts against the debtor while the debtor is working out a plan. The Bankruptcy Code is title 11 of the United States Code. It is a federal law that provides help for businesses or persons in financial difficulty. The Bankruptcy Code is divided into several chapters--Chapters 7, 11, and 13 are the ones most commonly used--each of which offers debtors a different set of options for dealing with their creditors.

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