The Bankruptcy Code provides for personal bankruptcy relief under chapters 7 and 13.
Chapter 7 provides in general for the discharge of debt together with the liquidation of non-exempt property by the Chapter 7 trustee. Chapter 7 is usually used by those with lower income and little or no non-exempt property.
Chapter 13 is usually used by those with higher income or substantial non-exempt property. It is also used by those who need to reorganize their secured debt, such as mortgage to avoid foreclosure. Under chapter 13, a debtor is allowed to reorganize their debt under a chapter 13 plan over a period of three to five years.