Bankruptcy Court

Bankruptcy court is a specialized court that deals with cases involving individuals or businesses that are unable to repay their debts. These courts oversee the legal process of bankruptcy, where debtors can seek relief from some or all of their debts through liquidation or reorganization. Bankruptcy courts handle cases under federal bankruptcy laws, ensuring that creditors are treated fairly and that debtors have an opportunity to get a fresh financial start.

Example

A company facing insurmountable debt may file for Chapter 11 bankruptcy, allowing it to reorganize its debts under the supervision of a bankruptcy court.