Bankruptcy is a legal process in which consumers and businesses can eliminate or repay some or all of their debt under the protection of the federal bankruptcy court.
Under a Chapter 7 filing your debt will be completely eliminated. However, there are certain income qualifications that have to be met in order to qualify for a Chapter 7.
Under a Chapter 13 filing you are able to reorganize debt according to your income. A plan will be adopted that allows you to pay creditors as a low as .10 cents on the dollar depending on your particular circumstances over a three to five year period.