Bankruptcy is a federal law that furnishes a plan, which enables a debtor that cannot pay his or her creditors to rectify his or her debts by dividing his or her assets between creditors. The ideology of the bankruptcy law is to permit the debtor to create a fresh start and not be penalized for not being able to pay debts. Bankruptcy law permits certain debtors to be dismissed from financial obligations that he or she has accrued, after his or her assets have been dispensed without having debts fully paid. Sometimes bankruptcy procedures permit debtors to stay in business and utilize business earnings to pay off debts. Pros and cons of the types of bankruptcies discussed in the text are as follows: Chapter 7