Chapter 7 is also known as "liquidation bankruptcy" and can erase many types of consumer debt, including credit card debt and medical bills. The bankruptcy trustee collects and sells the debtor's nonexempt assets and uses the proceeds to pay off creditors. Nonexempt assets can be sold by the trustee assigned to your case by a bankruptcy court. There is no repayment plan. You must pass a means test that looks at your income, expenses, and assets. Chapter 13 bankruptcy plan involves repayment and is reserved for people with stable incomes who are appointed a trustee that will handle distributing the monies to the creditors over a three-to-five-year period. The monthly payment is based on what you can afford to pay.