Khan Academy: Personal Bankruptcy: Chapters 7 and 13

Bankruptcy is the situation is when a person or other economic agent that owes more money than they will be able to pay back. In the United States, people who declare personal bankruptcy can do so under two provisions of the United States Bankruptcy Code, Chapter 7 or Chapter 13. Under the provisions of Chapter 13, some kinds of debt are restructured so that at least some of the debts are repaid. However under Chapter 7, some kind of debts are completely eliminated. In this video [13:04], we explore some of the differences between Chapter 7 or Chapter 13 bankruptcies, and some of the considerations when people consider these forms of bankruptcy need to think about.