Bankruptcy in the United States is a Federal matter.  Congress enacts uniform laws on the subject of bankruptcies throughout the United States.  However, this Federal law can be enhanced by state law.  Bankruptcy cases are always filed in the United States Bankruptcy Court.  Since the Bankruptcy case, validity of claims and exemptions are often directed by State law, the State plays a major role in many cases and thus is often not possible to generalize bankruptcy law across state lines.

On April 20, 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).  Principally, this changed who can qualify for a Chapter 7 bankruptcy discharge.  Under this act, filers with higher incomes will not be allowed to file bankruptcy under Chapter 7, but will be forced to seek relief under Chapter 13 bankruptcy discharge.

Furthermore, all debtors will have to get credit counseling before they can file for a bankruptcy case, and additional counseling on budgeting and debt management before their debts can be wiped out.  Also, you cannot file under any other chapters of bankruptcy if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.

Chapter 7:

Chapter7bankruptcy is also known as personal bankruptcy.  Chapter 7 is designed to assist individuals or small businesses liquidate assets and repay creditors to resolve financial disputes. Under the new Chapter 7 bankruptcy laws, you must determine if you qualify for chapter7. You have to measure your "current monthly income" against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for chapter7. If it is more than the median, then you must file for Chapter 13 bankruptcy.  These individuals will instead have to repay their debt under chapter 13 Bankruptcy.  Chapter 7 bankruptcies can be quickly completed, taking an average of four months to complete.

Chapter 13:

Chapter 13 bankruptcy is also known as a "wage earner's plan." Chapter 13 bankruptcy enables individuals with income to create a plan to repay all or part of their debts. Under Chapter 13 bankruptcy the debtor proposes a repayment plan to make installments to creditors over three to five years. If the debtor's monthly income is less than the state median, the plan will be for three years unless the court approves a longer period of time. However, if the debtor's current monthly income is greater than the state median, the plan generally must be for five years.