It might be a little difficult to read our bankruptcy court statistics if you’re not sure what bankruptcy is, so here’s a simple definition: Bankruptcy is a legal term used to describe a person or a business that can’t pay their outstanding debts. The debtor can start the process by making a petition in court, at which point all of their assets and valuables are closely examined. They may be used to repay a portion of the debts. In some cases the debts are dismissed entirely.