What does it mean to "discharge all of one's debts?" Well,
it means that if you have $25,000 dollars worth of maxed out credit card bills, that those bills and debts can be wiped clean, with a fresh start. Of course, not everyone can qualify for this, and there are downsides.
Usually, by the time people are considering filing bankruptcy, they are in so deep of a hole that there seems no hope... no way out. The creditors are calling, threatening with harassing phone calls. There have to be serious cash flow issues for the trustee to consider allowing a bankruptcy to go through the federal court system.
Based on the individual (or couple's) financial situation, they are allowed to file, and even keep some property. In California, this structure of keeping some personal property is called personal property exemptions.
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