The two most common consumer bankruptcies, compared in plain English.
Bankruptcy can offer a fresh start when debt becomes unmanageable. For individuals, the choice usually comes down to Chapter 7 or Chapter 13.
Chapter 7: liquidation
Chapter 7 can erase most unsecured debts, like credit cards and medical bills, often within a few months. In exchange, non-exempt assets may be sold, though many filers keep most or all of their property under exemptions.
Chapter 13: reorganization
Chapter 13 sets up a three-to-five-year repayment plan, letting you keep assets like a home while catching up on what you owe. It suits people with steady income who are behind on secured debts.