For consumer Bankruptcy ( as opposed to business Bankruptcy Chapter 11 ) there are basically 2 Chapters of the Bankruptcy code available, Chapter 7 and Chapter 13.

A Chapter 7 Bankruptcy is the most common as it is a complete discharge of all of your debts with a few exceptions such as student loans and tax liens which are not generally dischargeable( although there are certain limited exceptions regarding tax liens making some of them dischargeable ). Chapter 7 cases are typically cases in which the consumer does not have any non exempt assets that the Bankruptcy Trustee could collect and use to distribute to the consumers creditors. The typical case is where a consumer has a lot of credit card debt and other dischargeable debt and no assets ( typically does not own a house or if does own a house which is in foreclosure and consumer is not going to try to save the house ) and desires a complete discharge of all debts and thus a fresh start with a clean slate.

See Next article on Ch 13 and following that on procedure for both chapters.

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