The "debtor" is the person who owes debts. "Creditors" are the people that the debtors owe money to. The Bankruptcy Code is a creation of federal law, and is statutory in nature. This judicially supervised process involves a reorganization or liquidation of the debtor's assets and property, which is called "the bankruptcy estate", and will typically relieve the debtor of a substantial portion of his debts, which is called "discharge". Due to the fact that Bankruptcy is a product of federal law, bankruptcies are filed in federal court to maintain consistency all over the U.S. However, even though, Bankruptcy Law is for the most part uniform throughout the U.S., certain aspects will slightly vary from state to state, like for example what exemptions are allowable. In order to properly protect yourself, you should contact the Long Beach, Orange County, Los Angeles Bankruptcy attorneys at Smith & Garg to find out what the local allowable exemptions are. Most bankruptcies are filed voluntarily by the debtor. In very rare circumstances, creditors are allowed to file for what is called an "involuntary bankruptcy" against the debtor, but can only do so when there are more than three creditors petitioning, whose combined debts equal at least ten thousand dollars ($10,000).