Bankruptcy is the legal process of eliminating your personal liability on a claim. Typically, we think of claims as bills we have to pay. Most of these are eliminated in bankruptcy. The reason that we say that bankruptcy eliminates your personal liability on a claim is because the debt is not always wiped out, rather, your personal responsibility legally to pay it is eliminated. If the debt happens to before a house or car, the obligation can remain attached to the house or car and so while you may not have to pay the debt, you will also not be able to keep the house or car. Also, some debts are not this chargeable in bankruptcy.