Bankruptcy is a federal system of statutes and courts which permits persons and businesses which are insolvent (debtors) or (in some cases) face potential insolvency, to place his/her/its financial affairs under the control of the bankruptcy court. The procedure is that when the debtor’s debts exceed his/her/its assets or ability to pay, the debtor can file a petition with the bankruptcy court for voluntary bankruptcy. This will in essence wipe out the debts and financial obligations of a debtor.
In some cases, depending on the type of bankruptcy filed, the debtor also gets to keep certain properties and assets. Should bankruptcy be allowed? Why or why not?
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