Since 2005, your ability to choose between Chapter 7 and Chapter 13 bankruptcy has been tightened. To be eligible for Chapter 7 protection, you have to pass a two-part means test. The test compares your income with the median income for a family with the same number of individuals and with your expenses and debt. If you do not pass the test, you cannot file Chapter 7 bankruptcy and must file Chapter 13. A Chapter 13 plan is a reorganization that provides for payments of a portion of some debts and all of certain debts such as home mortgages. You must have a regular income to qualify for a Chapter 13, and some other requirements must be met as well.
A Chapter 7 plan involves liquidation and no payment is made on most debts. There are some debts that must be paid such as taxes, some support obligations, some student loans, and some intentional torts, which are debts that arise because you have injured someone intentionally or while driving drunk. These are only general rules of thumb, and what will or will not be paid depends on your specific case.
For more information, see: 11 U.S.C. §§ 101–112 (2010); The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 109 P.L. 8 § 707 (2005); U.S. Department of Justice, U.S. Trustee Program, Census Bureau Median Family Income by Family Size, http://www.justice.gov/ust/eo/bapcpa/index.htm (last visited July 17, 2012).