Bankruptcy is the inability of individuals to pay off the debt to their creditors. In US, the bankruptcy laws are properly renewed in time to protect the interest of public. the main two goals of the bankruptcy includes providing fair treatment for the creditors and give a better start to the consumers and business debtors who are involved in the processes of bankruptcy. There is a federal law governing everything about bankruptcy in US though the Congress has preferred to give away this to the State law. This law is composed of various chapters and the chapters stand for different proceedings that are to be followed based on the type of the bankruptcy.