Sometimes one needed a debt relief and there is one legal procedure to do it under bankruptcy. However, this involves serious procedures and taken only as a last step when all other ways have been exhausted. Once you have it in your credit report, it portrays severe notations for your future endeavors.

There are currently six different types of bankruptcy as stated by the Bankruptcy Code under Title 11 of the United States code:

1.) Chapter 7 Bankruptcy - is a basic liquidation for either individual or business. It provides quick relief from any financial obligations. However, this type is reflected on the credit report for 10 years from the date of filing. It portrays as one of the worst marks in the eyes of potential creditors, since it showcases irresponsibility and high credit risk.
2.) Chapter 9 Bankruptcy - is a municipal bankruptcy that caters more to local government organizations in adjusting their financial debts.
3.) Chapter 11 Bankruptcy - is to allow the business to stay while maintaining the reorganization of its financial obligations to its creditors usually filed by business to have temporary relief.
4.) Chapter 12 Bankruptcy - is only allowed for farmers and fisherman to maintain their livelihood despite having no funds to pay their financial obligations.
5.) Chapter 13 Bankruptcy - is a repayment-plan policy as stipulated by the court in the settlement whether partial or full in any given period. This is usually given to those with a steady source of income and remains in your credit report for seven years. While at the same time the debtor retains control and ownership of his or her debts.
6.) Chapter 15 Bankruptcy - is exclusive for international debt related to a specific country that incurs debts with the United States. This would allow for an additional assistance based on the country's specific obligations and capability to pay. Hence focus primarily on jurisdiction of debt based on International Trade Laws.

The common type of bankruptcy filed by individuals is either Chapter 7 or Chapter 13, whilst for corporations it is more akin to Chapter 11 and Chapter 7.