The courts
bankruptcy court
A unit of each federal district court handling debt relief and reorganization: Chapter 7 liquidation, Chapter 11 business reorganization, Chapter 13 repayment plans.
In full
Bankruptcy is exclusively federal, grounded in Congress's Article I power to make uniform laws on the subject. Filing triggers an automatic stay halting collection. Bankruptcy judges are appointed by the courts of appeals to fourteen-year terms rather than for life, which limits their authority over certain claims.
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A plain-language explanation for civic education, not legal advice. When in doubt, the official source named above controls.