NO TYPE of bankruptcy will erase certain kinds of obligations, like child support or student loans. There are differences in the way debt gets handled in personal bankruptcy, often depending on which kind you file for, Chapter 13 or Chapter 7. Chapter 13 allows those with regular income to repay debts over a length of three to five years. That drags things out of bit, but it stops the foreclosure process, meaning debtors behind on their mortgage can keep their house and catch up on payments over time. Those without regular income must file Chapter 7, which comes with no payment plan; all eligible debt, such as credit card balances, gets cleared.
How do you know which form is right for you? Bankruptcy law is complex, and certain provisions differ from state to state, so it’s often best for potential filers to contact an attorney before deciding.