In the United States we do not put people in jail for non-payment of debts.  The purpose of bankruptcy is to give people and other entities, such as corporations and partnerships, a fresh start by relieving them of debts or allowing them to restructure their financial situation.

Under liquidation, the assets of the debtor are liquidated by the court and the proceeds are distributed to the creditors as payment in full for any and all debts.  The debtor is absolved of any further payment to his creditors and is given a financial fresh start.

Under reorganization, the debtor is allowed to keep his/her assets and a court approved payment plan for a reduced amount of debt and payment is enforced upon both creditor and debtor.  This gives the debtor a chance to work his/her way out of debt without harassment from creditors.

Purpose of Bankruptcy Best Sellers from Amazon.com

The Associated Press Stylebook and Briefing on Media Law 2011
by Associated Press
Amazon Price: $12.16
 

Business Law: Text and Cases (West's Business Law)
by Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, Frank B. Cross
Amazon Price: $215.57
 

Financial Management: Theory & Practice (with Thomson ONE - Business School E...
by Eugene F. Brigham, Michael C. Ehrhardt
Amazon Price: $178.01
 

Business Law: Text and Cases - Legal, Ethical, Global, and Corporate Environment
by Kenneth W. Clarkson, Roger LeRoy Miller, Frank B. Cross
Amazon Price: $199.03
 

Cengage Advantage Books: Business Law Today: The Essentials
by Roger LeRoy Miller, Gaylord A. Jentz
Amazon Price: $125.49
 

Newsfeed display by CaRP

Purpose of Bankruptcy News
GN News

• Tiny Shred Of Bankrupt WaMu Emerging To Uncertain Future The Seattle Times
Tiny shred of bankrupt WaMu emerging to uncertain futureThe Seattle TimesMore than three years after Washington Mutual became the nation39s largest bank failure, a thin sliver of the company could soon emerge from bankruptcy and offer shareholders a small chance at recouping some value. By Drew DeSilver Filed for bankruptcy: and more raquo
• Bankruptcy Judge OKs Washington Mutual Settlement With Investors Who Lost W...
Chicago TribuneBankruptcy judge OKs Washington Mutual settlement with investors who lost Washington PostWalrath also said Wednesday that Tranquility Master Fund, a hedge fund that says it was misled into purchasing some 71 million in mortgage backed securities from Washington Mutual, can assert limited claims totaling 10 million for the purpose of Judge OKs Hedge Fund Claim Against WaMu Before Bankruptcy HearingFINalternativesJudge approves settlement in WaMu bankruptcyTheNewsTribune.comall 105 news articles raquo
• Details Ad Id 1311387 Jacksonville Daily News
Details Ad Id 1311387Jacksonville Daily NewsTHE PURPOSE OF THIS COMMUNICATION IS TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE, except as stated below in the instance of bankruptcy protection. IF YOU ARE UNDER THE PROTECTION OF THE BANKRUPTCY COURT OR HAVE BEEN
• MF Global, Natura World, Museum, Tribune: Bankruptcy San Francisco Chronicle
USA TODAYMF Global, Natura World, Museum, Tribune: BankruptcySan Francisco ChronicleThis report contains items about companies both in bankruptcy and not in bankruptcy. Bill Rochelle is away. Today39s column is written by Carla Main. Updates with Saab in Involuntary Bankruptcy Gottesman in Daily Podcasts Lehman in Briefly Noted. MF Global Told SampP It Had 39Never Been Stronger39 One Week Before CollapseBloombergRatings agencies to be quizzed over MF GlobalFinancial Timesall 327 news articles raquo
• Fitch Affirms Grand Central Funding Corp.aposs GIC Obligations At AposAAAsf/F...
Fitch Affirms Grand Central Funding Corp.39s GIC Obligations at 39AAAsf/F1sf39MarketWatch press releaseGCF, a bankruptcy remote specialty purpose vehicle with 46.7 million in total assets as of Dec. 31, 2011, was structured in 2001 to issue GICs primarily to municipalities and other third parties engaged in municipal finance transactions.and more raquo