Chapter 7 Bankruptcy

• Chapter 7 bankruptcy is designed to permit consumers to liquidate or eliminate their debt.
  
  

Chapter 13 Bankruptcy

• Chapter 13 bankruptcy allows a consumer the chance to develop a court supervised payment plan to satisfy debts due to creditors.
  
  

Chapter 13 Plan

• A Chapter 13 plan requires a debtor to make a monthly payment to the bankruptcy trustee for a period of between two to five years, until the balance due to creditors is paid off.
  
  

Automatic Stay

• When a bankruptcy case is filed, the court issues an automatic stay, an order that prevents creditors from taking any further action against the debtor absent a further order from the court.
  
  

Reaffirmation Agreement

• A reaffirmation agreement allows a debtor to pay off the balance due on a secured loan---a home mortgage, for example---and keep the property that the financing was used to obtain.
  
  

Discharge

• The final stage of a bankruptcy is discharge, the time when the debts to creditors have been liquidated (Chapter 7) or paid off (Chapter 13).