What is the primary goal of bankruptcy?

The primary goal of bankruptcy is to legally relieve oneself from overwhelming debt. Bankruptcy is a legal process that individuals or businesses can undergo when they are unable to pay their debts. This process provides a way for debtors to obtain relief from some or all of their debts, allowing them a fresh start financially.

When a person files for bankruptcy, they can have their debts discharged or restructured, depending on the type of bankruptcy. This means that they are no longer legally required to pay back certain debts, giving them the opportunity to rebuild their financial situation without the burden of unmanageable obligations.

In contrast, liquidating company assets may occur as part of a bankruptcy process, but it is not the primary goal. Managing large corporate debts can also be a part of bankruptcy, especially in larger corporate cases, but the overarching aim is the relief from debt rather than merely managing it. Similarly, restructuring business operations may be a step taken in some bankruptcy filings, particularly in Chapter 11 cases for corporations, but it is also not the main goal. The essence of bankruptcy is centered on the legal relief from overwhelming debt, which enables individuals or entities to regain financial stability.