Bankruptcy is a federal legal proceeding in which someone or some entity who is having a difficult time paying his or her bills gets a fresh start. Consumer bankruptcy cases – Chapter 7 and Chapter 13 offer different paths for consumers to obtain this fresh start but both can be highly beneficial to debtors who have fallen behind on their debts. Please note that just because someone files for bankruptcy does not mean they do not own assets or have money. Even in the consumer bankruptcy context, there are plenty of 100% Chapter 13 plans that pay back all their creditors because they have substantial income or assets