Chapter 7 is the basic building block of all bankruptcies. It is a “liquidation” chapter, meaning that you will just start over financially as soon as possible by putting all your assets into the hands of a Chapter 7 Trustee after careful preparation of your documents and close consultation with your bankruptcy attorney. This is normally done when your legally claimed exemptions protect all your property. In exchange, you get rid of all your debts when you receive your discharge order. More details are explained on our Chapter 7 page.
Chapter 13 is a reorganization chapter for individuals (as opposed to corporations, LLCs, Partnerships, etc.) which avoids the liquidation of assets. It is often used to catch up on mortgage payments you may have fallen behind on. It may be used for a tax situation, or when you just don’t want to lose some property that can be sold in a Chapter 7 case. Considerably more details are discussed in our Chapter 13 page.