Areas of Practice

Personal Bankruptcy Explained

"to relieve unfortunate and honest debtors from perpetual bondage to their creditors" - Joseph Story, 1833

The U.S. Constitution is amazing in its brevity. Considering this, it was with substantial foresight that the framers of the constitution granted congress the power to establish "uniform Laws on the subject of Bankruptcies throughout the United States."

In general the framers were the social, political, and financial elite of the the early United States. Even so, they understood the necessity of providing debt relief to those unable to repay their debts due to circumstances beyond their control.

What this means to you as you consider filing bankruptcy is that the process will occur in federal court. It will be governed primarily by federal bankruptcy law with some variations from state to state.

In regard to personal bankruptcies, federal law establishes two forms (chapters) of bankruptcy.

Chapter 7 provides complete relief from most debts. Upon completion of the process debtors are discharged from their obligations. This means the debt is gone. Exceptions exist and should be discussed with your lawyer.

Chapter 13 provides a review of your assets, income, and debt and establishes partial relief from your debt. The portion remaining and the time frame for repayment will be based on your circumstances.