Bankruptcy in San Francisco is when a company or individual legally declares their inability to pay back their creditors for funds borrowed. In a bankruptcy case, creditors may file a bankruptcy petition against an individual in an effort to obtain funds that are owed to them. This is referred to as involuntary bankruptcy in San Francisco. However, most bankruptcy in San Francisco is filed voluntarily by the debtor.

The primary purpose of bankruptcy in San Francisco is an effort for the debtor to obtain a "fresh start" by being legally relieved of their debts in court. Or, they may choose to repay creditors in a manner that is set up by a trustee and the bankruptcy courts for the debtor.

There are two forms of bankruptcy in San Francisco and in the United States. One is to file for Chapter 7 bankruptcy in San Francisco. This is when an individual liquidates their assets and property in an attempt to repay creditors. The other form of bankruptcy in San Francisco is to file Chapter 13 bankruptcy. This form of bankruptcy in San Francisco is also known as a reorganization bankruptcy in which the debtor reorganizes or restructures their debts. The reorganization process may involve what is referred to as an "orderly liquidation." This usually allows a debtor to carry on while satisfying an claims to creditors. Ina Chapter 13 bankruptcy individuals typically retain ownership of their assets, but must devote a portion of their future income to pay back their creditors, usually over a five year period.

There are also other forms of bankruptcy in San Francisco including Chapter 9 bankruptcy for municipalities, Chapter 11 bankruptcy for businesses or individuals and Chapter 12 bankruptcy for family farmers. Chapter 13 bankruptcy is for individual "wage earners." Chapter 15 bankruptcy in San Francisco refers to ancillary and other international bankruptcy cases.