There are actually six types of Bankruptcies and the two consumer cases are Chapter 7 and Chapter 13. They happen to be the most common type of bankruptcies as well.

Chapter 7 is designed to liquidate debt. That means the debts are wiped out without any payment whatsoever.  Today you owe, tomorrow you file a Chapter 7 and you no longer owe that debt.

A Chapter 13 on the other hand is bankruptcy version of a debt consolidation type of program. We transfer debts to the bankruptcy court and make payments towards settling those debts over a three to five year period of time.

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