Chapter 7 Bankruptcy is for people who cannot afford to repay their debts. A case under Chapter 7 eliminates most debts with the exception of student loans, recent taxes and child support obligations.
Filing a Chapter 7 case immediately stops garnishments, phone calls and other attempts to collect debts by creditors.
A debtor may want to keep certain loans such as a car loan or mortgage. This is usually allowed if he or she is current on payments and can afford to make those payments in the future.