Bankruptcy is legal process in which a debtor seeks an order of relief from the bankruptcy court. In Layman's' terms when someone files bankruptcy, they are asking the court for legal protection from their creditors. This legal protection could be a discharge of debts they are unable to pay or it could be additional time to repay a secured debt.
Debtors who pass the means test or do not have a regular source of income are eligible for a discharge under chapter 7 of the bankruptcy code. A discharge is a federal court order that prevents creditors from attempting to collect on a debt.
Individuals and Corporations can both file chapter 7 bankruptcy, however only individual debtors can receive a discharge.
The most significant issues that arise in chapter 7 bankruptcy cases are the loss of property and the possibility of the court denying your discharge. Very few debtors are denied a discharge by the bankruptcy court.