What's the actual difference between Chapter 7 and Chapter 13 bankruptcy?

Considering bankruptcy as an option but the terminology is confusing. What's the practical difference between the two most common types?

In very general terms: Chapter 7 is often called "liquidation" bankruptcy — a lot of your unsecured debts (credit cards, medical bills) can be wiped out relatively quickly, but you have to qualify based on income (a means test), and you may have to give up certain non-exempt assets, though many people keep everything that matters because of exemptions. Chapter 13 is more of a "reorganization" — instead of wiping debt out immediately, you follow a court-approved repayment plan over 3-5 years based on what you can actually afford, and it's often used by people who make too much to qualify for Chapter 7, or who want to keep an asset (like a house) that they're behind on payments for. Both stay on your credit report for years and both require filing in federal court — this isn't a DIY decision to make from general internet advice alone; a free consultation with a bankruptcy attorney (many offer them) or a nonprofit credit counseling agency is the right next step to figure out which, if either, fits your situation.