Bankruptcy court is a special judicial proceeding which determines how a debtor can settle accounts and move on. Bankruptcy courts are always federal, and not state, courts.
They were established in the Constitution and given structure by the Bankruptcy Reform Act of 1978. They give debtors a means of moving beyond debts that cannot be fully repaid.
There are several kinds of bankruptcy filings (found here — ‘chapter 7-15’, some for individuals, some for businesses, some involving foreign entities or persons operating in the US. Some are for absolution and the dissolution of a business entity, and other filings are requests for partial debt forgiveness and reorganization of the entity.
Certain attorneys focus on bankruptcy law, and it can be valuable to have an experienced and specialized bankruptcy attorney in such proceedings. Types of bankruptcy filings that you might have heard of before are Chapter 11, Chapter 9, Chapter 7, and Chapter 13.