Bankruptcy is a legal provision that allows you to declare yourself incapable of repaying debts. You could be truly bankrupt, which literally means that you don’t have a penny in your bank. Realistically, you don’t have enough money to repay the loans or creditors and would want the debts to be waived off.

Bankruptcy can be obtained for due to personal reasons, including strife among spouses. Personal bankruptcy or insolvency can be due to unemployment or if your business has run into unbearable losses. There can be other causes such as failing health or some personal incapacity that prevents you from working and hence repaying your debts.

Bankruptcy is almost always looked at from the perspective of debt and it is a way to get relieved of the obligations to repay. However, what most people don’t realize is that bankruptcy will derail your life the way you know it. Let us factor in these realities to understand bankruptcy.