The federal courts have a process known as bankruptcy which is designed to help individuals and businesses clear their debts and manage repayments under the protection of a bankruptcy court. The two kinds of bankruptcy are: reorganization and liquidation.
Liquidation is a bankruptcy process where you make a plea to the court to discharge your debts on your behalf. Some of your properties are liquidated (sold) by the court, and the proceeds are shared among your creditors. Liquidation only lasts four-to-six months, and normally you only need to attend court once.
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