Chapter 7, also known as a “liquidation” bankruptcy, is a bankruptcy procedure designed to instantly erase your debt. One of the advantages to Chapter 7 is that it immediately stops creditors from collecting any of your debts the moment you file the bankruptcy petition with the court. The other advantage is that you are provided with a discharge of debt without paying. Most individual bankruptcies are Chapter 7. It is relatively fast and simple. Typically, a case is opened and closed within three to six months. There are multiple reasons why people elect Chapter 7. Most people chose Chapter 7 because they have large payments that they cannot manage to pay down such as legal judgments or expensive hospital bills. Some people file during long periods of unemployment when they are simply unable to pay their bills. A Chapter 13 bankruptcy filing is different from Chapter 7 because it does not completely eliminate your debt. Instead, it provides you with the opportunity to pay your debts over an extended time period by coming up with a court-approved, court-supervised, and court-enforced payment plan. Not all creditors must be paid in full, however, and unpaid amounts are discharged (subject to the purchase of a property with an existing lien against the title without assuming any personal liability for the liens payment. some exceptions to discharge). Some Chapter 13 bankruptcy filers are given from three to five years to pay off their personal debts. New bankruptcy laws have made it more difficult to file Chapter 7 as the government would prefer that everyone meet their financial obligations. The eligibility requirements for Chapter 7 or Chapter 13 are based on your income, living expenses, and debts.