Filing a petition or statement with the government (voluntary or involuntary) that declares a debtor person, business or municipality/city bankrupt or, in other words, has no more money and/or cannot meet the financial conditions of the debt taken on.
In the U.S., this process falls under Chapter 11 of Chapter 15 of the regulated business laws. Chapter 9 bankruptcy is used for municipalities like cities, counties, townships or school districts. This process is supposed to allow the reorganization of the entity or refinancing under a strict and automatic plan to meet the debts. This petition is supposed to include a schedule of debts, assets and income potential of the person or company.