What are the two main purposes of bankruptcy law?

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2026-04-02 11:06

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The two main purposes of bankruptcy law are to provide a fair and orderly process for debtors to eliminate or restructure their debts, allowing them a fresh financial start, and to ensure equitable treatment of creditors by distributing the debtor's assets among them in a systematic manner. This legal framework helps maintain economic stability and encourages responsible lending and borrowing practices.

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