Bankruptcy law is a branch of debtor/creditor law largely governed by federal statutes. If you file for bankruptcy your debts may be wiped out (a "Chapter 7" or "straight" bankruptcy, subject to a growing list of limitations) or you may have a chance to reorganize your finances and pay back a portion of the money (a "Chapter 11" or "Chapter 13" bankruptcy). In either case, the federal court gives you a great deal of protection against the creditor. In determining exemptions and other matters, the federal court often looks to the law of the state involved. Of course, if you yourself are the creditor, you need to know about these laws so you can operate within the law when you try to collect money owed to you.

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