In Chapter 7 you are subjecting your non-exempt equity in your assets to court liquidation and attempt to discharge those debts that Chapter 7 will discharge.  In Chapter 13, you are reorganizing your debts by paying some or all of your debts over 3 to 5 years under a court approved plan.  Whether you should choose a Chapter 7 or a Chapter 13 depends on the kinds of debts you owe, your income, the value of your assets, and several other factors.

Chapter 7 is known as "liquidation bankruptcy."  In a Chapter 7 case, you file several forms with the bankruptcy court listing income and expenses, assets, debts and property transactions for the past year.  A court-appointed individual, the bankruptcy trustee, is assigned to oversee your case.  About a month after filing, you must attend a First Meeting of Creditors where the trustee reviews your forms and asks questions.  Despite the name, creditors rarely attend the First Meeting of Creditors.  If you have any non-exempt property, the trustee will ask that you turn it over to him or her.  The meeting normally lasts only a few minutes.  If there are no challenges from creditors, approximately two-three months later, you receive a discharge order, which is a notice from the court that "all debts that qualified for discharge were discharged."  Then your case is over.

Chapter 13 is also called "reorganization bankruptcy."  You file most of the same forms as you file in chapter 7, plus a proposed repayment plan, in which you describe how you intend to repay your debts over the next three to five years.  Some debts must be repaid in full; others you pay only a percentage; others aren't paid at all.  Some debts you have to pay with interest; some are paid at the beginning of your plan and some at the end.  A Chapter 13 Bankruptcy Trustee is assigned to oversee the case and handle your payments.

You will attend the First Meeting of Creditors about 6-7 weeks after you file.  If the trustee is satisfied with your payment plan, he or she will recommend its approval by the judge.  A few weeks after the First Meeting of Creditors, the judge normally confirms (approves) your plan if no creditor opposes it and the trustee has recommended it.

When a creditor or the trustee objects to a plan, the judge usually holds a hearing within a few months to determine whether your plan should be approved over the objection.  It is also possible for you to resolve the objection before the judge's hearing by amending the plan to satisfy the objection.  If your plan is confirmed, and you make all the plan payments called for under your plan, you will receive a discharge of any balance owed on all dischargeable debts at the end of your case.

You should consult with an attorney to decide which type of bankruptcy makes sense for you.