A chapter 7 bankruptcy can discharge all of your unsecured debt. This means that when you file a chapter 7 and receive a discharge you no longer most of your unsecured debts. There are some unsecured creditors that are not dischargeable in a bankruptcy, like student loans. However, if you credit card debt, auto possession debt, medical bills, pay day loans, unpaid cell phones bills, utility bills, etc… these debts are dischargeable in a chapter 7 bankruptcy.
A chapter 13 bankruptcy is payment plan to repay your debt. A chapter 13 consolidates all of your debt into one monthly payment plan. You no longer have to deal with several creditors because they are all consolidated into one payment. It is also possible to pay pennies on the dollars to your unsecured creditors. It is not uncommon for a person to pay ten (10) cents on a dollar to their creditors. If you have a 36 month or 60 month payment plan then at the end of 36 or 60 months all of your debts will be paid.