A Chapter 7 Bankruptcy is a straight debt elimination program in which all or most unsecured debts are discharged. Chapter 13 reorganization is a repayment plan that focuses on stopping creditor actions on secured debts, such as home foreclosures, and allowing you to consolidate other bills to create an affordable monthly budget. A Chapter 7 applies when your monthly income only meets your basic living expenses (i.e. mortgage payments, food, clothing, utilities, etc.). A Chapter 13 applies when you have some disposable income to pay your creditors, even if you cannot pay the debt in full. A Chapter 13 will stop a foreclosure sale or vehicle repossession. The plan will allow you to resume your regular monthly payments while paying the missed payments over time.