Bankruptcy gives debtors who cannot repay their loans a fresh start. When you declare bankruptcy, a bankruptcy trustee will gather certain nonexempt assets, such as stocks and bank accounts, to sell. The profits from these sales are given to creditors and applied to your debt. An advantage of this form of bankruptcy is that it requires no repayment plan, but you could lose your home or business, depending on the state in which you live. Chapter 7 bankruptcy is only available to individuals, not to business partnerships or corporations.