- Chapter 7 Bankruptcy: Chapter 7 bankruptcy discharges all unsecured debt. You do not have to pay back any of the unsecured debt, and you will be given a new start on your finances. Dischargeable debt includes credit card debts, debts resulting from medical bills, and some other types of debt. Some debts cannot be discharged, however, such as student loans, tax debt, child support, and court-ordered criminal restitution.
- Chapter 13 Bankruptcy: Chapter 13 bankruptcy allows consumers to pay back their debts over a three- to five-year time frame. If you are in danger of losing your house or your car, Chapter 13 may help you avoid repossession and foreclosure. As with Chapter 7 bankruptcy, Chapter 13 bankruptcy does not discharge student loans or child support obligations, but it can help you get a handle on it.