For the individual, generally speaking, there are two different types of bankruptcy: Chapter 13 and Chapter 7. Each type of bankruptcy has its own advantages and disadvantages. One of the advantages of Chapter 7 over Chapter 13 is that the debtor will not be required to enter into a lengthy payment plan in which payments would be made to the court over the course of three to five years, and the debt is discharged relatively quickly. Chapter 7 could be, however, a disadvantage to those debtors who own large amounts of property.
Chapter 7 bankruptcy is also known as "liquidation" bankruptcy. When you file, all of your property becomes part of your "bankruptcy estate." In a Chapter 7, the bankruptcy trustee assigned to the case has the power to liquidate the property in the bankruptcy estate in order to pay debts that are owed to creditors.