 TITLE: Bankruptcy or Debt Consolidation: Which Is Better for You? CONTENT: Bankruptcy is a legal process, overseen by federal courts, that's designed to protect individuals and businesses overwhelmed with debt. The two types of bankruptcy that apply to individuals are Chapter 7, also known as liquidation bankruptcy, and Chapter 13, or reorganization bankruptcy.\nBoth Chapter 7 and Chapter 13 bankruptcies can effectively erase, or _discharge_, many types of debt, including outstanding credit card balances, unpaid rent and utility bills, and private debts between you and friends or family members.\nBankruptcy cannot discharge all debts, however. Obligations excluded from discharge through bankruptcy include criminal fines, court-ordered alimony and child support payments, and unpaid taxes.\nBankruptcy also doesn't prevent mortgage lenders and auto financing companies, and other issuers of secured loans (those that use property as collateral), from foreclosing on or repossessing the property if you still owe money on it. END