Chapter 7 bankruptcy is a situation where all of your debt is removed. The court erases it all within a few months and you get to start over. However, this is only for people whose situations are very dire with no resolution in sight. It is uncommon for people to qualify if they have any source of income. Chapter 13 bankruptcy is a repayment plan where the court decides on a repayment structure for your unsecured debt, usually only requiring you to pay back a fraction of what you owe, after which the rest of your debt is erased.