The bankruptcy courts of the United States are empowered under Article 1 Section 8 of the US Constitution.   All bankruptcy cases are under the United States Federal Courts.  The fundamental purpose of bankruptcy is to give a fresh start or a way to reorganize existing financial circumstances.

What Do I Need to Do to Get Started to File Bankruptcy? (link):

What Do I Need to Do if I am a Creditor in a Bankruptcy? (link):

What about credit couseling and consolodators? (link):

There are actually six different types of bankruptcy under the law:

Chapter 7:   This is described as basic liquidation.   This is used by individuals and businesses where there is not going to be any reorganization.   For Individuals this is for a completely fresh start.   Individuals are permitted to keep certain assets and the state of Florida has exercised its option under the Bankruptcy Code to use its state statute asset exemptions controlled by Florida Statute Section 222.    These cover items such as homesteads, vehicle, a limited value of personal assets, and retirement accounts.

 
Chapter 9:  This is for government entities which go bankrupt.  If a city, county, or state went bankrupt they would file under this chapter.

Chapter 11:  This primarily for reorganization of businesses.  However individuals with very large debts and assets will be filed under this section.    The key objective is to reorganize the debtor so they may resume their financial functions outside the bankruptcy court's protections.

Chapter 12: This chapter is specific for family farmers and fishermen.
 

Chapter 13: This chapter is for individual reorganization.   It is primarily for those who do not pass the means test to file under Chapter 7 and have a regular source of income.    The recently passed means test only affects 15% of bankruptcy filings.  Individuals are permitted to keep certain assets and the state of Florida has exercised its option under the Bankruptcy Code to use its state statute asset exemptions controlled by Florida Statute Section 222.These cover items such as homesteads, vehicle, a limited value of personal assets, and retirement accounts. 
 

Chapter 15:  This is the newest chapter of the Bankruptcy Code and was added in 2005.  This  section of the bankruptcy code is dedicated to ancillary proceedings and proceedings related to international cases.   This chapter can be vital if you are a debtor with a claim subject to an international case.   

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