Petitioning for Insolvency Protection

A

The correct answer is A. Personal bankruptcy.

Personal bankruptcy is a legal process by which individuals who are unable to pay their debts can seek relief from creditors through the court system. Bankruptcy is a form of legal recourse available to insolvent debtors who can petition a court for protection from their creditors.

There are several types of personal bankruptcy, but the most common types are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is also known as "straight bankruptcy" and involves the liquidation of a debtor's non-exempt assets to pay off creditors. Chapter 13 bankruptcy, on the other hand, allows debtors to keep their property while they work out a repayment plan to pay off their debts over a period of three to five years.

Bankruptcy is designed to provide a fresh start for debtors who are overwhelmed by their financial obligations. While it does have long-term consequences, such as damage to credit scores, it can also help debtors regain control of their finances and move forward with their lives. However, it is important to note that not all debts can be discharged through bankruptcy, and the process can be complex and costly. Therefore, it is important to consult with a qualified bankruptcy attorney before filing for bankruptcy.