Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court.

Bankruptcies can generally be described as "liquidation" (Chapter 7) or "reorganization" (Chapter 13). Under a Chapter 7 bankruptcy, you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a Chapter 13 bankruptcy, you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all, depending on what you can afford.

In 2005, the Federal Bankruptcy Law was changed to correct some abusive practices. The most important change was the introduction of the "Means Test". If a household has over a certain amount of income, the individual will not be allowed to use Chapter 7 of the Bankruptcy law to wipe out their debts. Instead they will be forced to file a Chapter 13 which institutes a work out plan with creditors. If you are facing bankruptcy Attorney Ryan will work with you to file under Chapter 7 or Chapter 13.

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